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Recently, SunTrust Bank issued their 2017 Annual Report in which they laid out their strategic initiatives—including one to improve "efficiency and returns.” To accomplish this, they created an Efficiency Office, which, according to the company, “has enabled a heightened focus and rigor around driving and sustaining efficiency in order to position the company for long-term growth and success.”
The report also outlined the company's "significant investments" in automation (i.e., robotics, artificial intelligence, machine learning, and better end-to-end processes). This investment within SunTrust's Efficiency Office is to support their efforts in efficiency and their renewed "focus on higher value-added work."
Wow, that sure sounds like robotic process automation (RPA).
Last time, I wrote about RPA and its potential to decrease repetitive, mundane tasks within an organization, improve efficiency, and enable employees to “focus on higher value-added work.”
With RPA, you have the opportunity to step back and streamline processes, reduce human intervention, and decrease the amount of time it takes to complete a task. Think about what is and what could be:
- How long does it take from the time a bill is received until it's paid, and how many hands must it touch along the way?
- When an order is taken, customers invoiced, and payments are received and reconciled, are you (and your customers) satisfied with the time, simplicity, and ease of doing business?
- Have you ever walked through a department and thought, "What if a certain task could be handled by software to eliminate bottlenecks and free up valuable personnel?"
While RPA is an opportunity for every company, perhaps it's now a necessity.
Stockholders and business owners demand ever-increasing profits. With modest GDP growth and low inflation, it's difficult for many businesses to grow their revenue. If a company cannot grow their sales or raise prices fast enough to meet stockholder or owner expectations, the only other way to grow profit is to lower costs and raise efficiencies. While RPA may not directly affect sales, it can become a competitive advantage, creating a virtuous cycle.
Stockholders and business owners demand ever-increasing profits. With modest GDP growth and low inflation, it's difficult for many businesses to grow their revenue. If a company cannot grow their sales or raise prices fast enough to meet stockholder or owner expectations, the only other way to grow profit is to lower costs and raise efficiencies. While RPA may not directly affect sales, it can become a competitive advantage, creating a virtuous cycle.
In addition, the need to backfill employment to balance the increasing number of employees retiring is real. Barron’s Senior Editor Avi Salzman reports that baby boomers retire "every nine seconds," and that until 2027, "the nation faces a shortage of 8.2 million workers.” Thomas Lee, Head of Research at Fundstrat Global Advisors says, “It is the most substantial shortfall in at least 50 years, on a percentage basis,” according to his calculations.
In their annual report, SunTrust Bank does not call out the impact of their investments in technology on the bottom line. However, in 2017, SunTrust’s revenue grew at 4.5%, while their net income grew much faster at 21%—an impossible accomplishment without the wise use of technology in the back office.
RPA is scalable. It can be premises-based or cloud-based, enterprise-wide or narrowly focused, and can work for million-dollar companies and billion-dollar companies alike.
Richard Rosen is the Chief Executive Officer of The RH Rosen Group. The RH Rosen Group works with clients to reduce costs and improve cash flow through paper reduction and process improvements. Contact him at RichR@RHRosenGroup.com.
