How are Robots Automating Retail Business Processes?

How are Robots Automating Retail Business Processes?

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New automation technologies in the retail industry, in the last couple of years, are changing the way an organisation understands its productivity goals and cost efficiency. Recently, there is an increasing demand from retailers to adopt robotic technology as part of ‘Service Delivery Automation’ or ‘Robotic Process Automation’ (RPA).

READ: How Robots Improve Manufacturing And Other Processes

A case study by the Transparency Market Research pegs the value of the global RPA market at $5 billion by 2020. Research from Everest Group reveals that 40 percent perceive RPA as an enabling technology, 28 percent companies are already using RPA, and 50 percent of global IT companies are planning to adopt RPA in the near future.

Let us understand RPA in detail.

RPA is the process of substituting human workers for automation. The Institute of Robotic Process Automation explains the trend as the adoption of software robots which helps to trigger response, analyse and store data, capture transactions and effortlessly communicate with other digital systems. While the trend is troublesome for human workers, experts say that robots will never be able to fully replace the human manpower.

In the last couple of years, global retailers that had entered the Business Process Outsourcing (BPO) and Information Technology Outsourcing (ITO) arrangements are actively seeking collaboration with the RPA technologies. Take the example of global outsourcing behemoths such as IBM, TCS and HP have already deployed RPA systems that answer telephone calls across verticals like finance, customer care, business processes, compliance, procurement, and security. Their motivation in adopting the RPA systems is two-pronged: reduce the propensity of manual error and reduce overhead expense by eliminating human labour.

While the RPA systems offer tremendous benefits by speeding up business processes and reducing costs, the RPA technology is not devoid of its legal challenges. In the next section, the article will highlight few factors that a retailer needs to take cognizance of before deploying RPA systems.

Benchmarks

The relation between the cost of RPA deployment and the collective productivity expected needs to be explored. A retailer needs to ensure that the contract price for RPA is competitive and the benchmarking clause should focus on factors such as the scope of services, performance credit structure, payment structure, service levels, geographical deployment, and any other metrics.

Pricing

Certainly, a retailer wants to adopt RPA for better pricing models; however, it is essential to connect this price to robotic performance. In the case of a BPO or ITO, the price is directly linked to resource costs such as employee overhead and cost of maintaining an offshore office, but here, the RPA is directly linked to targeted outcomes.

Maintenance

Factor in the cost of maintaining the RPA systems such as testing for bugs, develop new approach pipelines and explore other capabilities. There should be complete data protection and security, with the disclosure of the nature of data collected from the target users.

IP Claims

Retailers need to take cognizance of IP ownership and IP infringement claims. RPA’s are essentially robots, and the robots learn and improvise by crunching numbers to create a better business proposition. Hence, retailers need to be clear on the ownership of the company deployed RPA data insights – will the company have full ownership or will the RPA service provider have a claim in it. Again, if the service provider’s RPA infringes on the intellectual rights of a third-party vendor, will the retailer be protected?

To avoid issues and understand the effectiveness of RPA deployment, retailers should opt for contractual plans with low termination clauses. Focus on the input and output of the robotic automation. Also, the retailer can choose to offer royalties and equity based on the contribution made to the development of the service provider’s RPA.

Endnote

Robots are a reality! The next few years will see a rise in the adoption of RPA models.

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