The true value of rapidly increasing digital labor

Yoshinobu Abe

Digital labor refers to the performance of conventional human-performed tasks (such as paperwork) being performed instead by robotic (software) that uses automation technology known as RPA. The use of digital labor is rapidly increasing across many industries. ABeam Consulting’s Yoshinobu Abe discusses the attention given to digital labor, the benefits of implementation, and the possibilities of future digital transformations.

Yoshinobu Abe

Executive Officer, Principal
Strategy Business Unit

Labor shortage and working style reforms Societal changes demand digital labor

In Japanese, digital laborers are referred to as “virtual intellectual workers”, and they take on the standard business processes traditionally performed by desk workers. Robotic Process Automation (RPA) supports this digital labor.

At ABeam Consulting, we have used digital labor internally since 2011 and some of our services are even available to customers. Until the summer of 2016, demand for digital labor in Japan was for two or three cases annually; however, demand has rapidly increased since then. A joint investigation between the RPA Association and ABeam Consulting, which took place during the first half of 2017, discovered that approximately 4,000 digital labor attention and interest it has been receiving.

For context, a rapidly aging society has resulted in a labor shortage and work reforms. As the number of available workers decreases, and long working hours are reassessed, it is necessary to enhance productivity by maximizing the use of limited labor and time in order to maintain global growth. Digital labor is a new solution that matches this societal need, which has also influenced the current and dramatic increase in both interest and usage.

The challenge for raising productivity with limited labor is the same for domestic and overseas companies alike. In overseas branch offices, there are often fewer employees than at the Japanese headquarters; however, there are still great expectations for digital labor. Certainly, growth will continue into the future. At ABeam Consulting, we have initiated multiple digital labor projects throughout Asia.

Human resources can be set aside in favor of more creative business processes by liberating them from simple tasks

At ABeam Consulting, we often receive questions about digital labor; for instance, “Aren’t the automation and optimization of processes the same thing as ERP?” Certainly, they are the same thing, if you only consider it from that angle. However, there are major differences in the implementation and improvements made by each.

First, the effects of ERP come from the mass migration of existing systems and processes, as evidenced by the phrase “big bang approach”. The ERP package combines both software and business processes into “business process best practices”, so it is defined by improvements according to the scale of implementation.

Digital labor can yield substantial outcomes for business processes, even when large-scale systemization is not an option. This is also true for complex business processes, in which human-performed processes remain even after system implementation. By migrating these processes to digital labor, companies can liberate their employees from simple tasks, so that they can put their energy toward more creative business processes like planning and strategy.

Conventional business process systems must match the business processes to the functions of the software, and fundamental business processes are often limited by the system. RPA matches the business processes and can also optimize the functions of the tool, so business processes can be digitized without changing the company’s way of working.

In recent years, digital labor has spread to a variety of industries and business situations. Results of a questionnaire conducted by ABeam Consulting revealed that, in addition to the finance industry, which has utilized digital labor extensively, there has also been a recent and rapid increase in the use of digital labor among the manufacturing and service industries. Given the direct connection between productivity and sales, there are inherent benefits to robotizing simple tasks.

Despite a strong belief that, generally speaking, digital labor involves back office tasks, the results of this questionnaire revealed an equal split between back office and front office tasks.

Front office tasks typically involve business processes, such as checking the sales of company products online and the real-time acquisition of exchange rates and market values. With such marketing tool uses, there is simply no comparison between humans and robots, at least in terms of the ability for each to gather and analyze information. Digital labor is not merely a tool for simple paperwork; it is an actual “worker”.

No human intervention is necessary for tasks performed by robots, so the benefits, in terms of information security and improved governance, should not be overlooked.

Digital labor platforms that eliminate clerical task automation tools

The goal of digital labor is not the “complete automation of simple tasks”. If digital labor can exist and cooperate alongside the various departments and business processes within successful companies, it will exist as a major platform for business processes.
This situation is known as a “digital labor platform”.

Currently, technologies such as AI appear all the time; to be sure, they appear frequently in the business world, but various services are now available via cloud technology as well. Digital labor will take on the role of connecting these services and company users. That is, by using a digital labor platform, companies will select and connect to the latest cloud services that suit their own business processes, which they can then return when they are no longer necessary. This life cycle for the selection, implementation, and disposal of services that suit the needs and changes in business will be realized by means of digital labor.

 

CASE STUDY

Example of digital labor implementation

Production of a managerial accounting report from SAP ERP financial accounting data
Daiwa House Industry Co., Ltd.

Daiwa House, a major residential construction firm, is improving whitecollar business process productivity from even the early stages, with the aim of increasing competition. To this end, they have adopted the new function of RPA Technologies, Inc., known as “Device Automation”. ABeam Consulting worked as a partner in the implementation of this function on requirement definitions and development, and usage began in July 2017.
The range of use for RPA includes “the promotion of work style reforms”, as well as improved internal controls, business processes, and compliance, as well as the optimization of financial accounting and information gathering.
Among these tasks, with the “advancement of management”, a pioneering initiative is underway to robotize business processes for the formation of managerial accounting reports. Specifically, the goal is to gather and analyze SAP and ERP financial accounting data using RPA. Managers become free of simple the business processes so that they can focus on defining strategies and examining prototypes.

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