Robotic Process Automation as an Accelerator to Enhance Jobs

One of today’s hottest topics in business is the impending displacement of human employees due to the introduction of technologies such as Robotic Process Automation (RPA), Machine Learning, and Artificial Intelligence (AI). While it is true that rules-based, “copy-and-paste” jobs are susceptible to being eliminated by the advent of these technologies, business executives have a unique opportunity to utilize these tools to improve operations from multiple perspectives.

The first thing that Fission likes to (click here for the Fission RPA approach) do on a new RPA engagement is understand the client’s goals and expectations. In our experience, most companies undertake RPA initiatives for two reasons:

1). To increase productivity and capacity by improving the accuracy and speed of completing both revenue-generating and support tasks (e.g., automating the retrieval of sales data from Fulfillment by Amazon, ensuring data transformation activities, and sales data entry into NetSuite so that an order can be quickly processed)

2). To decrease costs by eliminating FTEs or reallocating workers to value-generating responsibilities (e.g., automating the tedious copy-and-pasting of invoice data into an Accounting and Finance system by the lead accountant)

Examining the business case for RPA alone presents a strong argument for the introduction of these tools into the enterprise. However, an often-overlooked opportunity comes in the form of utilizing RPA as an accelerator to enhance jobs – resulting in financial and HR improvements. Before delving too far into this topic, let’s examine a typical RPA engagement – which is comprised of an assessment phase and a subsequent implementation phase.

Assessment:

RPA assessments involve multiple discovery sessions with employees performing the manual processes that have been tagged for evaluation. After asking the typical questions to gauge the feasibility of automation and the impact of an RPA implementation on financial metrics, developers generally have an idea of the processes that are a fit for RPA and work on creating a robust business case for automation. Developers are also quick to dismiss automation candidates due to either a lack of rules and consistency or because of a weak business case backing. However, further discovery can lead to opportunities for process re-engineering, enabling the implementation of RPA as a tool to automate the standardized steps of the process. Exceptions can then be flagged for manual work after RPA execution has ended.

There are several benefits to this approach to automation which businesses are leaving on the table. Financial metrics such as ROI, Payback Period, and NPV must be considered, but these deployments can also do wonders for intangible metrics such as employee engagement and team morale.

 

Implementation:

On a recent client engagement, Fission was tasked with evaluating seven processes across three different business units and subsequently configuring and deploying UiPath workflows to reallocate 3 – 4 FTEs to other value-added responsibilities. Many of the processes that made the assessment shortlist for an RPA Proof of Concept involved a lack of clear-cut rules that RPA developers require to make enterprise-wide deployments accurate and scalable. After our assessments, we were only able to find one end-to-end process that was able to be fully automated; meaning we were forced to get creative to meet the terms of the SOW.

Fission designed and deployed multiple RPA accelerators (automation that the end-user interacts with) to standardize process workflows and eliminate a majority of the workload of the employees whose processes could not be traditionally automated. These tasks involved a lot of what we coined, “investigative auditing”, which meant visually parsing relevant client documents (unstructured contracts) to analyze data and make decisions. Quotes from our assessments included, “We have to use our best judgement on most of these cases”, and, “We don’t know what we’re looking for until we get in the contract”. Couple this with Citrix access to green-screen technology and you have an RPA developer’s worst nightmare. Multiple sub-processes then ensued depending on this contract discovery. Even though these sub-processes were similar, they involved many exceptions and discretionary decision-making in the middle of the process as well.

Results:

As Sun Tzu once said, “In the midst of chaos, there is also opportunity”. Fission collaborated with employees to sequence all the manual and cognitive portions of the process upfront (where applicable). After re-engineering, we created workflows to automate the standard and repeatable portions of each process based on the rules that did exist. If it was discovered in the middle of automation that the current case was not going to be straightforward, we included a “Manual” button that the employee could click to flag the case for manual completion after UiPath finished executing.

The RPA accelerator approach enabled one employee with no previous exposure to RPA to reduce her workload by 95%, while also learning the inner workings of UiPath and increasing company productivity. She also was very adamant about the mental benefits to this “job enhancement”, saying that she used to be “drowning in manual work and each day looked the same”. By deploying RPA accelerators, we were able to “make her life easier”, allow her to take more ownership of the process that she was responsible for, and increase her overall engagement.

Thus, our call to action for RPA developers and businesses considering an RPA deployment:

Developers: It’s acceptable to say no to a process if it just cannot be automated. However, always take a moment to reconsider how you could make this employee’s life easier by utilizing process re-engineering and deploying an RPA accelerator. You may be able to generate client buy-in and get a sense of satisfaction at improving someone’s day-to-day life at the same time.

Businesses: While utilizing RPA to increase productivity and cut costs is great for top and bottom-line improvement, RPA can be used to enhance much more than financial performance. Benefits to Human Resources include: Increasing the general morale of your workforce, standardizing process workflows to streamline training and onboarding, and improving company culture by giving employees more ownership of their work. As we approach the threshold of the digital workforce, it is important to get creative in the way that “robots” and humans can work together. Utilizing RPA as an accelerator is one such way to do that.

About Fission

Fission assists buy-side and sell-side clients with TSA negotiations, IT carve-out planning and execution, and post-separation optimization. Please reach out to us with comments or questions at learn@fissionconsulting.com.

 

 

IT Carve-Outs: Frequently Asked Questions

A critical step in separating an acquired business unit (NewCo) from its current organization (Parent) is the IT carve-out. In summary, an IT carve-out refers to the activities needed to identify and separate NewCo’s IT assets from Parent’s IT environment. To operate as an independent company, NewCo will need to establish its own IT environment to support the business after separation. As part of this process, the new IT environment is populated with a copy of Parent’s systems that are critical to NewCo’s business operations. These system copies will then need to be loaded with NewCo data and extensively tested for proper functionality to ensure that the business is ready for independent operations after separation from Parent. The following summarizes the high-level activities that take place in an IT carve-out:

1. Clone relevant Parent systems and applications to set up copies in NewCo’s IT environment.

2. Identify and migrate all NewCo-specific data from Parent’s IT environment to NewCo’s IT environment. Data validation checks will be implemented to ensure that Parent data is not migrated as part of the IT carve-out.

3. Test NewCo’s systems and applications to ensure proper system functionality on day one of separation. Multiple rounds of testing will be conducted to mimic day-to-day system interactions and identify issues.

4. Execute the final system cutover plan to begin NewCo business operations in the standalone IT environment.

To accomplish separation before the TSA deadline, IT carve-outs are not new system implementations. Taking a copy of Parent’s systems will enable existing configuration, customizations, reports, and workflows to be present in the new system so functionality will not change. The only major difference between NewCo’s system and Parent’s system will be that Parent data is no longer present in NewCo’s environment.

Fission’s recommended approach to an IT carve-out is to collaborate and form a project team comprised of Parent, NewCo, and third-party resources (where applicable).  Parent resources are subject matter experts and should participate in design sessions to support the identification of data objects (i.e., custom data, reports, etc.) for migration, gather existing documentation for test script development, and assist NewCo resources in building the infrastructure necessary for the project. NewCo resources should also participate in design sessions, creating and executing test scripts, and infrastructure development. Third-party resources are useful for project management roles to establish a project plan and oversee successful execution. Third-party subject matter experts can also fill in existing knowledge gaps for areas such as system functionality, infrastructure setup, testing, data validation, and organizational change management/training.

Our team has compiled the most common questions that are asked when beginning a new carve-out project below:

1. What are the different approaches to an IT carveout?

A: As NewCo prepares to separate from Parent, NewCo must create standalone departments (e.g., IT, Legal, Finance, HR, etc.) that will be used to support the new business. A NewCo-specific IT environment will also be created to house all relevant systems, applications, and data needed to run the business. The new company has multiple options from an IT perspective when making decisions on how to set up the new environment:

1. NewCo makes an exact copy of Parent’s IT environment. This means that all systems and applications that were in use for Parent will be in place for NewCo. However, only NewCo’s data will be populating these systems upon separation (including shared data like customers, vendors, items, etc.).

2. NewCo makes a selective copy of Parent’s IT environment and discontinues the use of any Parent applications that are not relevant. All systems that are necessary for NewCo to support the business are installed while other applications used by Parent that are unrelated to NewCo will not be migrated.

3. NewCo makes a selective copy of Parent’s IT environment and installs new applications to maximize cost-savings and optimize for scale. Training on the use of new systems will be provided to employees to increase productivity and ease of adoption.

Approaches to NewCo IT environment setup will vary on a project to project basis. However, regardless of approach, all NewCo data will need to be identified and migrated to successfully run the business post-separation.

2. What is the difference between an IT carve-out and a system implementation?

A:  An IT carve-out is not the same as a typical system implementation and is intended to simplify the separation from Parent to avoid business disruption.  Little or no modification will be made to NewCo systems and applications during this project. The carved-out IT environment will be almost an exact copy of Parent’s environment and employee interactions with systems will not change unless a new application is installed.

In contrast, a system implementation requires many business decisions to be made regarding module configuration, process design, definition of data objects, creation of reports, etc. While NewCo will have an ability to redefine IT operations post-separation, the carved-out system setup will ultimately be the same in NewCo’s IT environment as in Parent’s IT environment. The IT carve-out is structured to avoid the pains that plague a typical system implementation.

3. What are the project phases and critical activities that must happen to achieve a successful IT carve-out?

A: Fission approaches a carve-out by dividing the work into six distinct phases with key activities that must be accomplished during each:

1. KickoffProject team resources are identified, system access is provided to prepare for data migration activities, the infrastructure build plan is established, and documentation is requested for a list of all custom data objects as well as any process and system specific materials that can be used to create test scripts.

The kickoff phase allows Fission to communicate with each project team member and understand the magnitude of information that needs to be gathered to properly design the project plan, identify all NewCo-specific data, and develop extensive test scripts in preparation for cutover. The more information that can be gathered upfront in the process correlates with an easier separation phase and a predictable working schedule throughout the project.

2. DesignExisting documentation is reviewed to create and finalize test scripts which will simulate all business activities that employees perform in the system. Carve-out rules are then developed and finalized to identify and migrate all NewCo data to the new IT environment. Custom data objects are comprehensively documented and examined to determine the logic for migration to NewCo’s environment. The project plan will be finalized with all resources required and hours allocated for work. The cutover plan is drafted and will be refined throughout the coming weeks. Project phases after Design will be focused on executing the finalized project plan.

Identifying custom data is the most important part of the design phase. Out-of-the-box system functionality does not tend to differ from project to project; however, the number of system customizations will impact the carveout logic being used for data migration. If all standard and custom data rules are identified and developed during this phase, the system will function properly with NewCo data during testing as this is not a new implementation, but a migration of a working system populated with NewCo data only.

3. Infrastructure BuildThe technical team will hold design sessions to: gather requirements and build the project landscape for data migration, ensure that resources have system access for data migration activities, set up the NewCo hosted IT environment, and identify the interfaces and connectivity requirements that NewCo will need to function as a standalone IT environment post-separation.

The Infrastructure Build phase can start in parallel with the Design phase because of the lead time needed to prepare and build the IT landscape necessary for a successful project. Once the IT landscape is created, technical resources will support the project by preparing the systems for data migration, manually executing necessary batch jobs (if applicable), and being on call in case of issues.

4. Migration Execution – Three rounds of data migration and system testing are conducted to extensively check for issues in system performance and functionality in NewCo’s IT environment. Post-migration, the data is validated to ensure that all data belonging to NewCo is migrated and Parent data is no longer present. The test scripts developed during the Design phase are then executed to identify system functionality errors. At the end of each round of migration, all issues are documented, and the data ruleset is revised accordingly for use during the next round of data migration testing. A mock cutover is performed at the end of Migration Execution to simulate the final cutover plan that will be used for the separation of NewCo from Parent’s IT environment.

If test scripts are comprehensively developed during Design, system issues are easier to discover and fix during the migration execution phase of the project. Identifying and resolving issues upfront leads to a properly functioning system during later rounds of testing as the NewCo data ruleset becomes more refined.

5. Cutover After a successful execution of the mock cutover plan, NewCo is ready to separate from Parent. Starting on Friday afternoon, the separation process will commence with the migration of the most recent copy of NewCo data. The entire project team will be on call over the weekend to execute their assigned tasks according to the cutover plan. Once the migration phase is completed, selected NewCo functional users will login to the new system to ensure that no critical errors occurred during the cutover process. Normal operations are resumed on Monday with NewCo employees performing their job responsibilities in the new system as separation has completed.

Cutover requires an effort in coordination with Parent, NewCo, and Fission team members. Travelling to a centralized location for cutover weekend is the most efficient way to ensure that all activities are taking place according to the cutover plan and team members are present if issues arise.  

6. Run the Business – The Fission team will be on call to resolve any issues encountered during the initial weeks following cutover. Communications will also be distributed to NewCo employees to provide the proper contact information for system support. When IT support responsibilities are transitioned to NewCo’s designated provider, the carve-out project has concluded.

Due to multiple data migration and testing cycles, system functionality errors are rarely encountered during the initial weeks following cutover. In our experience, the most common issue is related to system access which can be resolved by submitting a ticket to the designated IT support provider.

4. What does IT carveout success look like for the Parent company?

A:  A clean separation between Parent and NewCo signals success for the Parent company. NewCo will no longer rely on Parent’s IT environment or Parent employees for support in accordance to the terms of the TSA. Parent data will be completely purged from NewCo’s environment and the two organizations will begin to act as distinct entities on day one of separation.

5. What does IT carveout success look like for NewCo employees?

A:  An ideal IT carve-out is a non-event for business users and results in a clean separation from Parent support. The goal is for NewCo employees to operate according to business as usual on the Monday following cutover. All standard and custom systems, modules, applications, workflows, and reports will be functioning properly for users and only NewCo relevant data will be present in the IT environment. If new applications are in place, training will be provided to ensure that employees get up to speed as quickly as possible to avoid business disruption.

6. Which Parent resources are needed for the project and what are the time constraints?

A: Based on the complexity of the IT carve-out, resource requirements will differ on a case by case basis. Typical Parent resource requirements are as follows:

1. PMO – Responsible for managing Parent project team members and driving executive alignment. PMO resources are normally 10 – 50% allocated for the duration of the project.

2. Technical and Infrastructure TeamAssist NewCo technical and infrastructure team in the creation and administration of the project landscape to facilitate data migration. Participate in design sessions as subject matter experts. Technical and Infrastructure team members are normally 15 – 50% allocated throughout the project lifecycle.

3. IT Business Analysts – Participate in design sessions to assist in carve-out criteria identification. Assist with test script validation and answer business process questions as required. IT Business Analysts are normally 5 – 25% allocated for the duration of the project.

7. Which NewCo resources are needed for the project and what are the time constraints?

A: NewCo resources are an important part of the project team as they will ultimately be the end users of the new system. Typical NewCo resource requirements are as follows:

1. PMO – Responsible for managing NewCo project team members and driving executive alignment. NewCo PMO resources are normally 25 – 50% allocated for the duration of the project.

2. Technical and Infrastructure Team (if applicable) – Create and manage the project landscape and new IT environment to facilitate data migration and system setup. Participate in design sessions as subject matter experts. Technical and Infrastructure team members are normally 15 – 50% allocated throughout the project lifecycle.

3. IT Business Analysts (if applicable) – Participate in design sessions to assist in carve-out criteria identification. Assist with test script creation and answer business process questions as required. IT Business Analysts are normally 30 – 50% allocated for the duration of the project.

4. Functional TestersAssist with the creation and validation of test scripts. Participate in three rounds of system testing as part of the Migration Execution phase. Functional testers are normally 30 – 50% allocated for the duration of the project.

About Fission

Fission assists buy-side and sell-side clients with TSA negotiations, IT carve-out planning and execution, and post-separation optimization. Please reach out to us with comments or questions at learn@fissionconsulting.com.

Utilizing RPA to optimize your Portfolio Company

Introduction

Congratulations, you just completed a successful carve-out! Months of hard work culminated in an important milestone for your new portfolio company, but it only marks the beginning of a long journey to generating a high return on investment. A recently carved-out company may need additional improvements to operate at full efficiency. With shifting work responsibilities, open job positions, and new management in place, it will take time to solidify current operations and grow the business. There are many approaches to optimizing current processes in order to meet strategic objectives, but one of the quickest and least disruptive ways to achieve that is by deploying Robotic Process Automation.

After a successful carve-out, the IT advisors involved have the necessary understanding of your business and its technical landscape to be able to identify improvement opportunities through RPA.  The initial months after a carve-out provide the optimal time window for an RPA implementation, as business processes are not yet solidified and there may be resource gaps that exist in the organization. RPA implementations are agile projects that can quickly add long-term value through process standardization and productivity improvements, while offsetting potential hiring needs. This blog will serve as an introduction to RPA and outline our approach to RPA implementation services.

RPA Overview

RPA has rapidly evolved over the last two decades. It began as a simple form of “screen scraping”; the software would simply follow recorded mouse movements, clicks and keyboard inputs. Screen scraping use was limited, as it didn’t integrate with software or website user interface well.  Nowadays, RPA is much more advanced and is quickly growing in adoption rate among businesses of all sizes. RPA software is deployed directly within a client’s IT environment and can integrate with Microsoft Office products, web browsers, and VM/Citrix environments. RPA can be used for simple tasks such as sending emails or reading Excel tables, or complex jobs like manipulating ERP or CRM data using multiple robots that trigger logic-based actions. Additionally, modern RPA software doesn’t rely on writing code, but rather using built-in drag-and-drop features. This makes RPA very accessible, as internal maintenance does not require advanced expertise.

The benefits of integrating RPA into your business are substantial. Automation has the ability to decrease staffing and training costs, while eliminating human error. According to The National Association of Software and Services Companies, RPA implementations can result in 35%-65% of cost reduction in onshore operations and 10%-30% of cost reduction in offshore operations. The return time window of the investment is usually less than one year. For example, in one of our previous RPA implementations, Fission helped the client strategically reallocate 5 employees and reduce the Order-to-Cash cycle by 45 days, resulting in ~$300,000 in annual cost savings and a 5.7x ROI multiple.

In the post-separation phase of a portfolio company, RPA’s drawbacks become its advantages. Normally, the deployment of RPA would require redistribution of the workforce and result in adjustments to internal management and HR departments. However, during an unstable period where employees have been pre-exposed to change, RPA becomes an asset that can improve productivity and make employees’ lives easier by decreasing workload. For this reason, Robotic Process Automation is an effective way to optimize a business after a large-scale transformation.

Fission Approach

1. Assess
The first step in any RPA project is an RPA suitability assessment. Fission consultants begin by meeting with client sponsors to understand the goals and expectations for undertaking an RPA initiative. This helps to generate the shortlist of processes to target in evaluations. Next, interviews are conducted with the employees responsible for each process. We take the information gathered in these interviews and utilize our RPA scoring matrix to compare processes and determine suitability for automation. Not every process is a candidate for automation due to a lack of standardization. RPA cannot replace human logic and problem solving, but it excels in automating repeatable, rules-based tasks. Once the business signs off on the RPA implementation candidates, the next phase begins.

2. Design
The Design phase is crucial for a successful and on-time delivery of the robot. Taking an additional week to identify all the necessary steps and possible exceptions ensures the build phase is efficient and allows for a robust error-handling process to be implemented. During this phase, Fission will create a future state process map to review with the appropriate stakeholders and will utilize this output to configure RPA workflows during the Build phase.

3. Build
The Build phase is the bulk of an RPA project. Fission consultants utilize the chosen RPA software and build the initial workflow to validate that the future state process design is suitable for full-scale implementation. We then implement exceptions handling and event logging to manage errors and track metrics. The detailed design sessions previously conducted ensure that minimal client resources are needed during the Build phase. After the build is finalized, Fission holds three rounds of User Acceptance Testing to ensure that the workflow is ready for deployment.

4. Deploy
The first step of the Deploy phase consists of acquiring the necessary software licensing for the client. An RPA workflow can either be attended (meaning that a human is needed to begin RPA execution) or unattended (the workflow is scheduled and processes on its own). Different license types are required depending on the chosen deployment strategy and Fission can assist with obtaining the proper licensing for compliance. Fission will then create training documentation and hold workshops for key client resources to explain the logic behind the workflow if maintenance is needed. Finally, when final signoff has been given, the robot is provisioned in the client’s IT environment.

Conclusion

Leveraging RPA after a large-scale transformation project is a great way to further optimize a portfolio company. Since carve-outs are highly disruptive and result in many unknowns, they create the ideal time window for additional improvements to be made. Potential benefits of RPA deployments include business process optimization, productivity improvements, error reduction, workflow standardization, cost cutting, efficient resource allocation, and many others. As part of our Portfolio Company Optimization services, Fission can assist clients in implementing RPA to maximize return on investment.

 

 

About Fission

Fission assists buy-side and sell-side clients with TSA negotiations, IT carve-out planning and execution, and post-separation optimization. Please reach out to us with comments or questions at learn@fissionconsulting.com.

 

 

Technology has evolved, why hasn’t your carve-out strategy?

Successfully navigating a complex transformational project like a carve-out requires an effort in coordination. Synergies are analyzed, and months are spent negotiating the terms of the sale: assets, physical locations, employees among others. The new company must appoint executives and stand up multiple departments to support the primary operations of the business such as legal, finance, HR, and IT. Adding to this complexity is the IT separation and migration necessary for a new standalone entity to function. Few things are more counter-productive to a carve-out than unnecessary meetings preventing the actual work from beginning. Unfortunately, there is rarely a straightforward approach to a large-scale technology carve-out; many applications are comingled which makes planning for separation difficult and stressful. Few internal employees also have the comprehensive view necessary to execute a successful IT carve-out from both Parent and NewCo lenses. Past IT carve-out projects required large teams of resources, and consequently meetings, between Parent, NewCo, and third-party consultants to determine the carve-out strategy: Identifying NewCo’s in-scope data and applications, negotiating licensing, sequencing resources and project activities, determining the future-state IT landscape, selecting a hosting strategy, etc.

Parent stakeholders are concerned with data security, proprietary information and the amount of work their resources have to perform to assist NewCo in separation. NewCo resources approach carve-outs with a lot of uncertainty, questions, and siloed knowledge. Third-party consultants bring a large team of broad specialists and work to piece together information from Parent and NewCo for a successful project to ensue. This siloed approach made technology carve-outs risky; with many projects becoming delayed and going over allocated budgets.

The IT component of a carve-out is often over-complicated when it doesn’t have to be. By utilizing an agile approach built on technology, productivity can be increased without locking up stakeholders in unnecessary meetings. Fission Consulting has developed technology accelerators specifically for large-scale divestitures to obtain a 360-degree view of Parent’s IT landscape and identify all in-scope data for the carve-out. With the time saved by utilizing a technology-centric methodology, Fission can incorporate additional rounds of data migration and testing into the project plan to deliver a properly functioning IT landscape to NewCo upon exit from the TSA.

We start by running a scan of Parent’s database to generate the list of relevant NewCo data for the carve-out according to the terms of the sale. Using technology in place of people to identify carve-out criteria eliminates uncertainty and allows services to be fixed fee in pricing. With less boots on the ground and over 50% of the work by Fission consultants taking place remotely, Parent and NewCo resources can focus on the other pressing decisions that are necessary for separation. Existing rulesets from previous projects are leveraged for a straightforward approach to standard data migration. Custom data is then further examined to determine necessary transformation rules.

Once the carve-out criteria is finalized, mock data migrations to NewCo’s landscape are conducted to refine the in-scope ruleset and identify system errors. Automated data validation checks have been developed to gauge the success of data migration as well as quickly fix carve-out logic for the next iteration of testing. By repeating this “test and refine” approach, the end result is a NewCo IT environment that is free of Parent data and is ready to operate upon day one of separation. For more information on how Fission can assist during your next carve-out transaction, contact Brandon Lage at blage@fissionconsulting.com.

Conclusion

Fission Carve-Out Services were built and refined specifically for carve-outs and have been utilized successfully in multiple large-scale system transformation projects. Fission’s team of carve-out specialists can advise private equity clients in the pre-close diligence phase to provide expertise in the activities needed for IT separation. By informing the carve-out strategy with diligence findings, an accelerated approach to carve-outs is enabled to make IT separation a non-event for all stakeholders and accomplish a quick exit from the TSA on time and under budget.

About Fission

Fission assists buy-side and sell-side clients with TSA negotiations, IT carve-out planning and execution, and post-separation optimization. Please reach out to us with comments or questions at learn@fissionconsulting.com.

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