Omdia recently conducted and published a study looking into enterprise adoption of RPA and IA, digging into barriers to adoption, benefits of adoption, and more. This Analyst Opinion highlights some of these findings and what they mean.

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Summary

The COVID-19 pandemic has exposed enterprise vulnerabilities to disruption of all kinds, inefficiencies, lack of digital capabilities, and ineffective ways of doing business. Many enterprises are paying RPA and Intelligent Automation (IA) more attention as a result, an area that was already garnering mindshare even ahead of the pandemic. The market is poised for strong growth, but the majority of enterprises are not yet past the consideration phase.

Omdia recently conducted and published a study looking into enterprise adoption of RPA and IA, digging into barriers to adoption, benefits of adoption, and much more. From the Enterprise RPA & Intelligent Automation Study, there were three key messages that stood out:

  • vendors remain years ahead of average enterprise readiness in terms of RPA/IA adoption
  • many barriers to adoption are human-centric
  • there’s more to RPA/IA than cost and time savings, though they remain paramount.

The enterprise readiness gap

More enterprises than ever before are beginning to invest in, or at least consider, RPA and IA solutions. In fact, this study found that 28% of respondents indicated RPA/IA is now a necessary consideration or investment due to challenges to their businesses brought on by COVID-19. This, coupled with ongoing advancements in AI technologies like machine learning (ML) has expanded the reach and caliber of what intelligent automation in particular can do for processes and business as a whole.

While 11% of respondents indicated they are already utilizing RPA/IA, another 50% are planning to do so by early 2022, and the remaining 39% in the year following (see Figure 1). This affirms the strong growth Omdia forecasts for the RPA & intelligent automation market, which is expected to reach $2.85bn by the end of this year, reflecting over 40% growth year-over-year, per Omdia’s Market Forecast: RPA & Intelligent Automation, 2019-26 report.

Figure 1: RPA/IA utilization and plans Figure 1: RPA/IA utilization and plans Source: Omdia

Despite only 11% of enterprises actively investing in the technology per this study, the market continues to grow at strong, double-digit rates (see Figure 2), underscoring the gap between first-movers and the average enterprise—the haves vs. the have nots. While first movers continue to scale their deployments and in turn, scale the benefits they provide, many enterprises face a myriad of roadblocks that have inhibited adoption thus far, including budget, competing IT priorities, lack of expertise, and security concerns.

Figure 2: RPA and intelligent automation, market sizing and forecast 2019–26, Figure 2: RPA and intelligent automation, market sizing and forecast 2019–26, Source: Omdia

While vendors have been talking for some time about the success stories of their first-mover or fast-follower flagship large enterprise customers, there are far more organizations that have yet to begin their RPA/IA journey even though many are actively considering the technology. This presents a notable gap between vendor messaging and average enterprise readiness. While study data indicates the gap will shrink in the next year or two as more organizations implement RPA/IA, it is yet to be determined what the next wave of vendor announcements will bring and if they will meet enterprises closer to where they are at or move further away.

This phenomena is certainly not new nor is it unique to the RPA/IA space, but it is one that could negatively impact both enterprises (finding it more challenging to find a vendor that meets their needs) and vendors (missing out on new logo or revenue opportunities). The RPA/IA vendor landscape is in a nearly constant state of change as more vendors invest in the space, both small and large. The difference, however, is that larger vendors, especially those large ISVs where RPA/IA represent a small piece of their portfolios, have more resources and reach. This forces smaller vendors to not only keep pace with innovation for long-term strategies but also to mind what enterprises need in the near-term, stretching them thin.

While the adoption rate is low and the gap persists, Omdia expects the adoption rate to rise, even since this study ran in March–April 2021. For instance, UiPath reported significant growth in its number of customers, adding 2,400 customers in the last 12 months to its roster of now over 8,500. Moreover, this study indicates a healthy amount of pent-up demand that will generate a much larger landscape of RPA/IA customers and users, which will in turn generate spend and RPA/IA market growth throughout the next two years and beyond.

Many of the challenges to overcome tie back to people

The road to RPA/IA adoption for many enterprises is filled with obstacles, many of which are organizational or human-centric, especially as a set of strong best practices has yet to emerge industry-wide. While there are technical concerns inhibiting RPA/IA adoption, especially relating to security, poor data quality, and poorly defined processes, the human element is not to be ignored. Many organizations report a lack of technical expertise as a barrier to adoption. Moreover, concerns about executive and end-user onboarding persist, and if not managed early-on, could be inhibitive to the success of a deployment should the company move forward with it without everyone being on board.

Regarding end users, while many indicated positive feedback, this study found that one-third of respondents indicated employees are neutral or negative towards their organization utilizing RPA/IA. While vendors maintain their stance that RPA/IA is to help elevate human workers within their organizations by equipping them with digital workers rather than eliminate the need for human workers, the study found that more than one-quarter of respondents indicate staff reduction is one of their top three goals of RPA/IA usage. This presents a real challenge for enterprises to overcome, underscoring the need for transparency early and often, from setting expectations to educating the end-users not only on how to utilize the technology but also how the technology will impact them individually.

Benefits extend beyond cost and time savings

Cost and time savings have become synonymous with automation for many. While it does take time to get there, and it is important to manage expectations that in order to implement and scale RPA/IA effectively, it is a multiyear journey, as cost and time savings are by far the top intended outcomes and benefits of RPA/IA usage. There are, though, more benefits to be had.

For instance, even with security and data management concerns that have inhibited many to adopt the technology to date, RPA/IA solutions are inherently auditable and well-documented through visibility into the log files, which can help instill trust in the bots and the decisions they make. Trust in AI is, rightfully, a big concern. The technology is advancing very fast and regulations have yet to keep pace. RPA/IA solutions provide a decisioning trail such that enterprises can see and evaluate the decisions made by bots and other automated processes. This can help companies trust the solutions, but also generates more data to make better decisions going forward, helping further grow reliability and trust in the bot over time.

Lastly, as RPA and IA solutions advance and benefit from growing AI capabilities, they have the ability to reach more processes, more users, and more departments, further scaling the opportunities within a business and in turn, scaling the benefits RPA/IA provide. The ability to automate parts of or whole processes that lie within semi-structured or unstructured data that are highly variable with the incorporation of AI technologies greatly expands the reach of RPA/IA in the back office, but also into the front office which has customer-facing implications as well.

Appendix

Methodology

Omdia and its Informa Tech partner InformationWeek conducted a survey in March and April of 2021 in which we surveyed enterprises regarding their perceptions, intentions, and adoption status of RPA/IA software. We inquired about barriers and benefits, impact on employees, long term goals, outlook, and more.

Definitions: Robotic process automation (RPA) refers to activities where software “bots” mimic humans performing rules-based tasks to improve process efficiencies and quality, and ultimately, the accuracy of process outcomes. For the sake of simplicity throughout this survey, “RPA” includes intelligent automation platforms that consist of RPA and artificial intelligence (AI) technologies such as machine learning (ML) and natural language processing (NLP) to process unstructured data, automate variable processes, provide prescriptive analytics, and ultimately, automate tasks and processes that involve contextual awareness, decision-making, or judgment. Intelligent automation is often also known as intelligent process automation (IPA).

Further reading

Enterprise RPA & Intelligent Automation Study (June 2021)

Market Forecast: RPA & Intelligent Automation, 2019-26 (May 2021)

UiPath sets the stage for IPO in a busy March (April 2021)

Intelligent automation moves up the list of enterprise priorities, vendors take note (February 2021)

Omdia Universe: Selecting a Robotic Process Automation Solution, 2020-21 (December 2020)

Author

Cassandra Mooshian, Senior Analyst, RPA & Intelligent Automation

askananalyst@omdia.com