Why the robotic software market will continue to grow

26 August 2020 Consultancy.com.au

Robotic software provides a range of opportunities. Using robotic automation, companies can automate repetitive and mundane tasks, and improve customer experience while allowing employees to focus on high value activities. Malcolm Allen, Head of the Robotic Process Automation practice at Partners in Performance, explains why the robotic software market will continue to grow in the coming years.

1. Declining returns from a mature ERP market

Some of us remember when the integrated Enterprise Resource Planning (ERP) market emerged in 1990 from earlier large scale transaction systems markets. Whole teams were created to manage the implementation of this innovative technology. It required bulky hardware to run the software, which amounted to a substantial investment. The value of bringing together many different systems under one integrated system made it worth the investment. The “old way” of purchasing specialised systems for each business process resulted in expensive integration, massive data challenges and missed whole-of-business opportunities. All of these issues were gone with the introduction of ERP software.

Over the years ERP software became an intrinsic part of business strategy. It evolved so much that today’s ERP software has few similarities with earlier generations. However, over the decades ERP software returns have declined. Implementation has become notorious for overruns, overspending and returns below expectations.

Now, with the need to get real-time data available anytime, anywhere, companies face a “move to the cloud”. This means additional investment in ERP systems that do not entirely meet users’ needs. While ERP solutions offer benefits, this often comes too slowly. Also, the ever-advancing technology means upgrades to implement and additional expenses. 

Why the robotic software market will continue to grow

What we have seen in recent times is that many companies are increasingly interested in adopting more Agile approaches; those which are not possible with ERP systems. Modern business requires a faster adaptation to market changes and constant improvements through endless iterations. It is the era of “fail fast” philosophy. Naturally, organisations are moving away from big transformations and choosing more nimble solutions, an approach that offers the flexibility to navigate today’s market.

2. Rapid innovations in middleware

ERP systems helped companies integrate IT into their business strategies. However, as mentioned, this approach has increasingly not delivered all that was expected. Companies have started noticing that their middleware automations deliver more positive results and faster. They have started developing applications to quickly perform business tasks, pushing demand for middleware applications and infrastructure.

As a newer market, middleware is innovating at an accelerated pace. It enables a breadth of solutions across a range of organisations. This flexibility is a clear advantage. Since the technology is more dynamic, companies can keep adding new components to improve processes, which is not always possible with legacy systems. Middleware plays a vital role in integrating the old legacy systems with new components. Using the ERP traditional waterfall development approach, this integration would be costly and slow. Swift integration offers a key differentiator.

Middleware offers numerous technology options such as robotic process automation (RPA), process mining, optical character recognition (OCR), and machine learning (ML), opening up use cases that can be delivered in much more rapidly. Companies can rapidly remove pain points and improve processes incrementally. Since it is much easier to develop and build in these platforms, development times and overall project costs are often materially lower than ERP alternatives.

We are seeing the development of a new market. The innovation in market components further imply market growth. In particular, improvements in Robotic Process Automation represents one of the biggest trends in the market; it is currently considered the fastest growing segment in enterprise software with global spending expected to reach $25 billion in 2025, with seven times market growth up from today’s $3.6 billion. 

It is important to note that middleware market growth indicates the adaptability of the market. Successful company strategies will not be limited to one specific technology. Companies that can balance ERP and middleware automation are likely to create the best mix for building business resilience.

3. Rising employee empowerment

It is true that technological advances drive productivity. But many forget there is also a human element. Increasing education standards at all levels of the workforce, along with increasing familiarity with business improvement techniques like Agile, Lean, Six Sigma etc, and increasing expectations of front-line workforces due to “hollowing out” of the middle layers of business mean, there is an increasing need to empower employees to drive their own increased productivity. 

Middleware provides an opportunity for front line workers to be less dependent on ERP driven IT solutions to meet their productivity needs. 

Additionally, front line workers are constantly in contact with customers, so they have a deep understanding of operational issues. This knowledge, combined with an empowerment culture, makes them natural owners to identify, prioritise and develop improvements to processes and automations. This strengthens workforce engagement and enhances performance. 

Middleware tools are key to push this empowerment further, enabling employees to leave transactional tasks to middleware and leaving them to focus on high-value tasks such as customer service, problem solving and judgement. In addition, middleware tools can monitor many more variables than human cognition can cope with, highlighting where employees should focus their effort.

For example, at Partners in Performance, we have clients who use middleware AI for large-scale tick-of-works service dispatch, accounting for hundreds of variables including real time weather, traffic, learning levels, etc, where human dispatchers used to focus on half a dozen variables.


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