A February 2021 report published by #ImagineCanada titled Ongoing impacts of the COVID-19 pandemic on the Charitable Sector found that many of us are experiencing higher demand while facing staff and volunteer shortages. A few highlights from the survey include:
- 31% of charities have fewer paid staff and 60% have less volunteers
- Over half of charities have seen revenue decreases, with an average decline of 43%
- 50% of charities report that staff ability to avoid burnout has decreased
- To offset losses, organizations are drawing on reserves, selling assets, borrowing, and reducing staffing costs
- 67% of organizations are prioritizing immediate challenges over work that builds or maintains long-term organizational capacity
So where does that leave the future of the sector? The challenges we face are only getting greater while our ability to respond to them is not. If this last year and a half has taught us anything though, it should be that we are resilient, deeply committed to making our communities better, and more technologically adaptable than we thought. There is a technology that is available today that can reduce the administrative burden on your staff while reducing risk at low or even no cost for the needs of most non-profits. This combination of characteristics has the potential to unlock immense capacity in the charitable sector without any incremental investment. This technology is called robotic process automation (“RPA”) and it can revolutionize our sector, if we embrace it.
RPA is about creating automatic routines around tasks that don’t require judgement, such as repetitively saving a file that is received by e-mail or setting up a new staff in multiple systems. Before discussing #RPA and how it might help your organization though we will go through a quick history of how we got here.
A recent history of operational service delivery
With the spread of the internet came new opportunities for organizations to connect and collaborate across geographies with a speed that was not previously possible. This along with the constantly decreasing price of data storage enabled those that could afford it to start automating routine processes across the organization. Solutions like enterprise resource planning (“ERP”) systems quickly became commonplace in manufacturing, banking, telecommunications, energy, and various other sectors. Early in my career I was a business lead for an SAP implementation at one of the worlds largest food manufacturing companies. SAP is a leading ERP system and the project took more than 5 years and cost over $1 billion USD globally to deploy.
The figure to the right represents how the
confluence of factors at this moment create an opportunity for a brighter future in the charitable sector. The first of the factors, in yellow, was that the enormous corporate investment in ERP systems began paving the way for automation of routine activities with software. ERP solutions never became mainstream in the non-profit sector since they were never affordable and there was not sufficient demand in the 1990’s.
Independent of this, something else started emerging in the 1990’s and continues to gain momentum to this day. Evidence-based and evidence-informed practice started to be common lexicon in our sector. Funders and donors are increasingly focused on services based on scientific evidence. This is reasonable and I would argue a very positive step in ensuring accountability and effective use of resources, but the consequence is that organizations now have to collect significant amounts of data without the resources or tools to succeed. As we move rapidly through the 21st century, we start to see increasing demand from the charitable sector for tools to improve the ability to collect data accurately and efficiently. In the early 2000’s, more solutions are coming to market to meet the increasing demand, but the tools are quite rigid and very expensive for most of the charitable sector.
The sector recognized that they needed access to better data, which required expensive systems and sophisticated operational procedures. Shared service models and outsourcing became common to try and leverage economies of scale and cut costs. These approaches came with their own unintended consequences, notably that the way of working became very rigid for the client organizations and required many workarounds. This burden fell largely on direct service staff, reducing the proportion of time allocated to service delivery, an unfortunate consequence that persists today.
Cloud computing provided flexibility and infrastructure-as-a-service (“IaaS”) has enabled on-demand computing capacity from anywhere with an internet connection. Organizations no longer need to invest in expensive servers with complex networking and physical security requirements and they don’t need to purchase hardware for peak needs. Software-as-a-service (“SaaS”) greatly reduces up-front expenditures on accounting systems, donation management systems, medical record systems, and so on while also providing far more flexibility than was available in traditional databases. Most importantly, the cost began to come down on these solutions.
In the early 2010’s most charitable organizations had digital systems for file management, payroll, accounting, customer/donor relationship management, and rudimentary medical or client management system. These tools continue to get cheaper, more flexible, more intuitive, and ultimately more accessible to the charitable sector. Another unintended consequence has emerged though…getting these systems to talk to each other is much harder than what the consultants have led us to believe. The burden of getting our systems to talk to each has fallen on our support staff, or worse, our direct service staff.
The following table summarizes how our well intentioned initiatives have ultimately increased the administrative burden on the sector.
Robotic process automation focuses on the transactional and administrative activities (far right column above) that have become a significant portion of the workweek for most workers in the charitable sector. By automating the activities that are good candidates, we can empower our teams to spend more time on making our world better. RPA also addresses many of the integration issues that currently exist, inherently improves security and privacy, requires no programming expertise, and has a proven return on investment across industries and functions. The tools required are also donated to non-profits in Canada.
What is robotic process automation?
Let me get one thing out of the way first. I think the term robot in the name does a disservice to the ease of use and accessibility that are inherent in RPA. As defined by AICPA, robotic process automation (RPA) is the use of software (called “bots” or “softbots”) to handle rules-based, repeatable tasks currently performed by humans. Have you ever had to save e-mail attachments on a shared drive? How about copying values from a standard PDF form into a spreadsheet or database? What about reporting information with the same source data to multiple stakeholders in different ways? Whether you perform any of these activities or the multitude of other rules-based, repeatable tasks we do in our work, RPA can free up capacity and empower your people to prioritize serving their communities.
Rather than spending a lot of time trying to explain RPA theoretically, I will demonstrate a simple use case in the following videos.
The best description that I have heard is that “RPA takes the robot out of the human” (Leslie Willcocks, London School of Economics). As you can see from the video, a process that would have taken a few minutes with that small data set took a few seconds. If this was done manually, there would also be room for error. Once I test the process and know that it works, I know that it will take seconds every time I run it and that it will give me the expected outcome every time.
Now imagine a dataset with many records, dozens of programs, more sources, and different types of output formats required. How long might a manual process like this take? What if it needs to be done daily or weekly? How many times a day are we doing repeatable, definable tasks that don’t require any judgement to get to the work that matters? We can be liberated from these robotic activities and let “bots” do them. Bots, or softbots, are the configurable software that is setup to perform the tasks you assign and control.
The business case for robotic process automation
The value proposition for RPA is greater than just some efficiency gains, so let’s look at some of the key benefits in the context of the current non-profit sector.
- Efficient: this is probably the most obvious benefit and is clearly evident in the video. The time savings can be significant once the bots are developed.
- Accessible: RPA is a low-code solution, meaning that most of the work can be done using a familiar graphical interface rather than needing to know any programming languages. Bots can be built by your IT specialists, but they can also be built by your receptionist, accountant, clinical staff, or anyone else with very little training.
- Non-intrusive: RPA does not need to integrate with any other technologies. It can be applied to interact with many applications, but it is a standalone tool. This also ensures that it can be implemented quickly and without the high cost and expertise required for integrating software.
- Empowering: if your staff don’t need to spend their time doing the robotic tasks, more attention can be focused on higher value activities. For most of us, this will increase job satisfaction by creating space to focus on the organization’s mission.
- Consistent execution: the software does not have emotions or get tired. The process will run 100% compliant to how it is designed by the bot. This means less rework and lower risk. Your auditors will love this too.
- Cost effective: bots are much cheaper than people for this work, especially for non-profits that can access donated tools (more on pricing to follow). Bots can be deployed in days or weeks with expertise you already possess in the organization, so they are low cost to deploy.
- Automated: events can be used to trigger the bot to mimic the activities previously performed by humans. You don’t need to worry about the bot forgetting to do something or not getting to it because they were too busy.
I have never eliminated a position as a result of implementing RPA nor do I advocate for doing so, especially in the social purpose sector. The reality of our work is that we are stretched and too bogged down in administration as a result of the complex controls required to protect taxpayer money and public trust. RPA is a way for us to get off the hamster wheel of cycling through reporting periods with our funders. If we can remove some of the burden of reports and paperwork, we might just have enough time to create a better world.
The effect of RPA on audits
Since the start of the digital age, auditors have been confronting technologically dependent processes with the level of reliance on humans varying greatly. In general, auditors have strong procedures in place already to evaluate your organizations control framework, with or without RPA. There is also work being done in the assurance sector to evaluate RPA and the shift towards artificial intelligence and additional guidance is likely to emerge. There are two specific considerations that are worth mentioning as RPA relates to external audits (i.e. assurance) in the charitable sector.
- Auditors typically like automation because it is easier to test for. Over time, this can make your audit faster, cheaper, and less dependent on your staff resources. When testing a manual process, many transactions need to be evaluated to ensure the information is not materially misstated. When testing an automated process, the tool used perform that task needs to be tested once to ensure the expected output is produced. Then they just need to evaluate that the tool was not tampered with, an easy task in most modern applications. It may take extra time to explain the tools the first time around to the auditors, but once they understand and trust the tools it will simplify the workflow in the future. We suggest keeping an open dialogue with your auditors throughout the year and building a relationship with them as partner in minimizing your organization’s risk. They are experts in this space and you should trust them to let them know that you are starting to test RPA and ask if they have any specific expectations that may help simplify the transition, such as specific documentation.
2. One of the great things about RPA is that is accessible. Whether you start using RPA or not, your auditors are, especially if you are being audited by one of the bigger firms. Testing procedures of manual processes are a perfect target for automation because they are easily definable and repeatable. When I worked as an internal auditor, I had access to the back-end tables in all of our databases while external auditors relied on a much more limited dataset. I was often able to test thousands of records or more in minutes. With RPA, your auditors do not need access to the tools
embedded in your systems anymore and can build the automation for the processes on their own. If you are internally monitoring risk based on manual testing procedures while your auditors are reviewing your records using RPA, there is a good change they will have better insight into your risks than you do.
Sounds great! How do I get started?
I am not going to get into which RPA tools are best here, I haven’t used enough tools with a variety of different applications to provide recommendations. If you are interested in that, you can access some rankings and reviews from Gartner here.
Canadian non-profits are eligible for donated Microsoft 365 solutions through Techsoup. In this suite, Microsoft’s RPA tool, called Power Automate is included. Because there is no cost to entry and many charitable organizations are on the #Microsoft cloud infrastructure already and/or familiar with the Microsoft interface for users. For premium features such as using APIs to connect to most web applications, the cost can be as little as $3.80/user/month. They have even recently made Power Automate Desktop (an even simpler, although less scalable version) for free for all Windows users. The bot in the demo video was built using Power Automate (cloud) for no cost.
RPA relies on an agile deployment framework, so the process of building, testing, and deploying a bot can be completed in days or weeks. #YouTube is a wealth of information when starting out as well for learning the basics. Our recent certification in RPA paired with our extensive expertise in the charitable sector ensure that we can help you identify the right processes to start with and give you the tools and support to succeed in your RPA journey!
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