Operations Practice

Operations management,
reshaped by robotic
automation
Today’s automation shows huge promise for saving time, money,
and human effort. For operations centers, is it now just a matter of
“ready, set, automate”?

by Ian Didion, Pablo Hernandez, Avani Kaushik, and Kobi Masri

© Getty Images

December 2019
 Few technologies rival the latest advances in operations centers in hopes of radically
automation in their anticipated ability to enhance accelerating the automation of operational
organizations’ performance, regardless of industry. processes, while also cutting costs.
The potential adoption rate is stunning by any
measure: the McKinsey Global Institute estimates What RPA offers operations centers
that, using demonstrated technologies, more In most industries, operations centers have used
than 81 percent of predictable physical work, 69 traditional forms of automation for many years.
percent of data processing, and 64 percent of data- But these came with serious limitations. For
collection activities could feasibly be automated. example, custom software managed interfaces
with multiple backend systems, but these
These three categories describe much of the work implementations took several years to complete,
handled in operations centers, which we define as and were expensive and quite rigid.
organizations that manage equipment and services
remotely, or that manage human forces in the By contrast, new automation techniques, such
field (field forces). Examples include telecom and as RPA and cognitive technologies, are having
electrical utility network-operations centers (NOCs), transformative impact. By automating manual
IT operations centers, remote resolution centers, and repetitive tasks, successful operations
contact and call centers, and dispatch centers. centers are reducing costs by 30 to 60 percent
while increasing delivery quality.
Indeed, the early stages of automation have already
begun. Our colleagues’ late-2018 automation survey We see three fundamental differences between
found that three-quarters of respondents had either RPA and traditional automation technologies:
embarked on an automation journey, or would do
so in the coming year (exhibit). And in our recent 1. Accelerated implementation. Like traditional
studies supporting the introduction of automation automation techniques, RPA achieves high
technology to operations centers, we’ve witnessed impact by both lowering costs and increasing
first-hand the extent to which automation can the quality of manual tasks—but it does so
transform the technological paradigm of front-office much faster. Many of the improvements
operations management. that may have required months, or even
years, to achieve can be replicated with
RPA technologies in a matter of weeks. This
The automation journey rapid timeline results from RPA’s low barriers
Robotic process automation (RPA) has been a to entry and out-of-the-box controls. For
particular focus of attention, having been widely example, a telco wholesaler used automation
adopted in organizational support functions— to reduce cycle times in one of its back-end
initially in shared-service centers (SSCs) that processes by 99 percent. This automation
had taken much of the responsibility for many solution took two developers just four days to
companies’ HR, finance, procurement, and IT implement.
functions. These environments were ripe for the
introduction of RPA because many processes were 2. Low barriers to entry. Traditional
standardized; RPA could therefore be applied to automation technologies require multiple
reduce costs (which had been rising) and improve technology stakeholders, developer
accuracy. teams, user-experience designers, and
system instructors. In contrast, RPA can be
RPA technologies have significantly improved in overlaid on an existing IT infrastructure. It
recent years, providing the high levels of quality and is developed by mirroring the user’s inputs,
stability required for sensitive, customer-related while customization requires only a minimal
processes in operations centers. Following the programming background. Consequently,
successful implementation in SSCs, organizations training RPA developers typically takes just
started expanding the application of RPA to two to four weeks, compared with more than

2 Operations management, reshaped by robotic automation

 Web 2019
Managing a moonshot
Exhibit
Exhibit 1 of 2

Three-quarters of organizations say they are automating now or will be soon.

Three-quarters of organizations say they are automating now or will be soon.

Scaling across Don’t know

multiple parts
of business

No plans to automate

Fully automated
at least 1 function
or business unit "

Plan to start in
coming year

Pilot under way

SOURCE: “The automation imperative,” McKinsey & Company Operations, September 2018, McKinsey.com

a year for software engineers. An industrial- there are a few common activities where we have
services company needed only about a month seen RPA add significant value.
to train more than 20 remote-center engineers
on RPA, combining a one-week training course Network monitoring. By correlating network events,
with three weeks of teaming the trainees with RPA can generate alarms for multiple standardized
experienced RPA developers. (pre-defined) issues.

3. Enhanced control. RPA applications come Remote troubleshooting and resolution. RPA
with out-of-the-box monitoring, reporting, and can support issue tracking, data gathering, ticket
system controls in place. Standard RPA controls analysis, and remote reset. Intelligent incident-
include scheduling customization, queue management systems can detect similar issues
creation, email notifications, and response- and resolve them—such as at a telco that uses RPA
triggered actions. The same level of controls and to improve its responses to network-equipment
monitoring for software automation must often failures. The RPA bot executes steps according to
be developed from scratch. a codified troubleshooting guide, leaving human
agents to resolve only those issues not yet fully
What’s best to automate? documented.
Although RPA’s value proposition is attractive
relative to traditional technologies, companies must Automated dispatching. Companies can use
stay focused on feasibility. Within operations centers, automation to dispatch jobs from operations centers

Operations management, reshaped by robotic automation 3

 to field agents, to handle exceptions in workforce substantial attention.
allocation by load-balancing, and to optimize
transportation routes for dispatched jobs. These Re-skill your organization
steps help reduce time-to-resolution and New skills will be essential to ensure smooth
increase the amount of time spent on judgment- execution of the automated processes and create
based work. sustainable impact. Among the most critical are
the identification, quantification, prioritization,
Self-help facilities. For routine level-one and and mapping of new processes that should be
level-two requests, RPA can automate ticket automated. Next, solution design, programming,
logging, routing, and replies, which form the basis and execution will all involve significant
of self-help tools for customers. By minimizing new capabilities, as will the monitoring and
the need for in-person call-center support, these management of automation once it is in place.
solutions improve not only incident tracking, but
also customer experience. Automatic analysis Rethink business–IT collaboration
of customer call logs enabled one telco provider When robotic-automation projects run into
to reduce call-center agents’ handle times by 10 problems, a crucial reason is often misalignment
percent for an entire family of service issues. between IT and business leaders—who will need
a deeper level of cooperation than has historically
It’s all about impact been typical. Because business users understand
Successful RPA-led transformations have the processes and are responsible for operations
focused on capturing value by starting small, performance, they must identify which processes
exploring select use cases, and scaling up over to automate, and should participate closely in RPA
time. This methodical approach has yielded a development. For its part, IT must contribute its
wide range of performance improvements at advanced technical knowledge and experience
operations centers. in running production-level quality systems, and
ensure end-to-end performance of the bots. Close
—— By automating performance-indicator collaboration is also required whenever there is
monitoring and increasing remote-problem a change in the application, so that bots can be
resolution, a large managed-services provider updated appropriately.
reduced its NOC and field-force costs by 20
to 30 percent. Support the transformation with a CoE
A center of excellence (CoE) is vital both as
—— One large telco provider has automated 80 a source of expertise and to define priorities.
percent of its resource scheduling, resulting This central team, with responsibilities cutting
in a 10 percentage-point reduction in across operations and other functions, leads
escalations and a 15 percent reduction in the organization’s transformation, identifies
cycle time and field costs, while another telco opportunities for automation, and helps scale up
used automation to reduce NOC operational current automation programs. The CoE’s areas
costs by 55 percent. of expertise should include attended bots (for
call centers), chat bots, advanced analytics, and
—— Automation helped a technical call center cognitive agents.
reduce its costs by more than 40 percent,
while increasing quality of service. The role of the CoE evolves over time. In the short
term (usually the first six months), the CoE’s diverse
support responsibilities will include identifying the
What are the imperatives for success? potential for automation; prioritizing opportunities;
For robotic automation to achieve its full potential managing early proof-of-concept testing;
across a business, organizations must proceed codification of learnings; recruitment of CoE
with care. The leaders’ success stories all team members; training of business people; and
rested on a few critical factors, each requiring oversight of existing transformations.

4 Operations management, reshaped by robotic automation

In the long term, the CoE’s primary role master complementary technologies to
evolves. Activities include managing the entire apply automation successfully. Beyond
transformation from end to end (including RPA, several additional automation
prioritization of initiatives and funding), providing technologies are already showing promise.
technical support for more complex issues, and For example, by combining RPA, cognitive
establishing best practices. The CoE also supports agents, and artificial intelligence for
initiatives of varying sizes across the company, image processing, a multinational recently
seeds subject-matter experts and advocates reduced the cost base for one of its
where needed, and provides thorough coaching to operations centers by more than half.
team members. Additionally, the center can give
light support to business-led initiatives. Focus on creating impact
For a successful transformation, a company
In most situations, we have found it better not to needs a comprehensive, end-to-end view of
have a separate CoE for operations, but instead the automation opportunity. It should prioritize
to have a single automation CoE for the whole automation activities by business value, ease of
company. Such a CoE will not only be responsible implementation, and risk. Usually, prioritization
for RPA, but will also serve as an interface is more effective when done within functional
with other parts of the organization involved in “domains” comprising 50 to 200 people rather
technologies such as advanced analytics, chat than on a process-by-process basis—so,
bots, and virtual agents. for example, for the HR domain as a whole
rather than just for the employee-onboarding
The CoE’s support should be guided by four main process. Typically, domains with high business
principles: value and high ease of implementation can be
quick wins for automation.
—— Establish an agile way of working through
cross-team collaboration and knowledge In addition, leaders must think through how
sharing. Agile automation follows the “scrum” they will redesign the organization to take
method as its basic framework. Typically, advantage of the capacity increases that
each use case is addressed in “sprint” cycles usually result from successful automation.
lasting two to three weeks. A cycle starts with Moving people promptly to higher-value work
mapping user stories. It moves on to process helps multiply automation’s impact—but the
analysis and developing a process map at the higher-value work must be identified and
task level. The final step is technical design and available for the people to do. That often
development. means restructuring the organization at the
same time that the automation solution is being
—— Drive standardization by ensuring a consistent designed and implemented, so that judgment-
automation approach and reusability of heavy tasks flow through to the right teams
components across different sprint teams. once the automation is in place.

—— Coordinate with IT for automation delivery and

execution.
It is time for companies to transform
—— Continuously introduce emerging their operations centers using RPA and
technologies beyond RPA. Because the other automation technologies. Such a
technology landscape for automation is transformation needn’t take long—and can
continuously evolving, organizations must generate tremendous value if done correctly.

Ian Didion is a senior digital analyst in McKinsey’s New York office, where Kobi Masri is a consultant; Pablo Hernandez is a
partner in the Madrid office; and Avani Kaushik is a digital expert in the Southern California office.

Copyright © 2019 McKinsey & Company. All rights reserved.

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