Integration of RPA with Blockchain - A Potential New Way to Re-Think Business Models

Today, there are many different technologies that fit the “disruptive” designation, including Robotic Process Automation (RPA), Blockchain, Artificial Intelligence (AI), and the Internet of Things (IoT), because of their major ramifications to the business and technology landscape. The disruptive nature of these technologies is forcing companies to innovate and deliver new services while transforming existing service models to bring in more revenue and reduce the cost of doing business. It is widely asserted that companies’ success in embracing "disruptive" technologies will determine the winners and losers in the new economy.

Individually each of these technologies have shown great potential in providing a number of benefits such as greater transparency, improved customer experience, and operational efficiencies. However, their full potential will be largely untapped if such technologies are evaluated in silos and applied in a disjointed way. It is imperative to consider complementary components of disruptive technologies and ways to integrate them. Via this post, I will look at integration opportunities among RPA (with cognitive capabilities) and Blockchain, their potential application areas, challenges, and the path forward.

Brief Overview of RPA and Blockchain

RPA enables business process automation using software robots, also known as digital workers. Over the years, RPA has evolved from performing mundane tasks, such as opening e-mail attachments and completing e-forms, to do more judgement-based tasks, such as visual perception, learning, collaboration and problem solving. Blue Prism, one of the market leading RPA vendors, has made this intelligent augmentation of its digital workforce a corporate priority and now refers to its product as connected-RPA.

RPA is still deep in the high growth stage, with Gartner projecting a 57% increase in RPA work in 2019 alone. By the end of the year 2022, 80% of the large and very large organizations are projected to have deployed RPA in some form.

Blockchain is an immutable secured ledger which validates and stores value exchange transactions on a distributed network using a peer to peer consensus mechanism. Blockchain has evolved from the infrastructure for Bitcoin transactions to an independent technology providing trusted disintermediation with potential applications in numerous areas.

Blockchain technology has already seen multi-billion dollars in investments globally, with a number of start-ups and industry players evaluating the potential benefits through pilot programs. The IDC (International Data Corporation) has projected Blockchain spending to reach upwards of $11.7 billion by 2022. Gartner is projecting the Blockchain market to reach between $2 trillion to $3 trillion by 2030.

Cross Industry Applications of RPA and Blockchain

Both RPA and Blockchain debuted in the financial industry. However, the use-case exploration has extended way beyond into other industry sectors such as insurance, retail, supply chain healthcare, utilities, and government. Despite countless use cases, the end goal is the same - Focus your human talent on meaningful activities that require the things that humans do best – creativity, design, strategy, interpretation, judgment, and empathy. Then, let trusted digital infrastructure handle all repetitive activities and back-end transactions processing.

Process automation via RPA is ideal for repetitive, high volume, and rules-based processes. There are number of use-cases specific use-cases are many, with new ones emerging every day, especially in the Front Office and other areas like Data Management / Reporting and IT Operations. 

Blockchain is seen as an ideal technology for asset tracking, records management, and transactions management use-cases. So far, the most advanced application of Blockchain has been for payments processing, claims processing, provenance management, and legal ownership management.

Power of Combining RPA with Blockchain

Customer expectations are making businesses adopt a radically different paradigm when it comes to digitally transforming processes. Technology solutions need to seamlessly interact with end users and systems, while automatically scouring through vast amounts of data, and providing a trusted transactions processing back-end. The integration of RPA and Blockchain can help realize these needs.

RPA with cognitive capabilities (e.g., connected-RPA) can play the central role as an intelligent gateway to interact with end users, capture data inputs, and interact with IT systems to disseminate information in real-time. From a "people" perspective, the human role will be that of spotting processes for automation, training digital workforce, and interacting with digital co-workers.  Blockchain can provide shared ledger and distributed infrastructure for the transaction processing capabilities among organizations. From a "process" perspective, Blockchain’s role will be that of enabler for smart, trusted, and frictionless value exchange between transacting parties.

RPA can enable Blockchain to exchange information with existing IT systems as well as help establish monitoring around transaction processing activities. Blockchain can ensure trust to RPA orchestrated process flows by providing secured environment to validate all transactions and maintain audit trail in an immutable shared ledger. If integration is designed amicably, RPA and Blockchain can fully automate end-to-end digital process flows to achieve enterprise-wide goals.

We are already seeing emerging themes in leveraging the combined power of RPA and Blockchain:

• Fully Automated & Trusted Data Processing: RPA driven processes interact with end-users and systems to capture data (e.g., customers, orders, documents) using bots and orchestrating the workflow for processing. Blockchain can provide a ledger to record business transactions and processes for automated decisions (e.g., identity management, information verification, payments processing). Example Use-Cases: Rewards Point Management in Hospitality Industry, Peer-to-Peer Landing, Insurance Claim Payments Processing, KYC Processes in Financial Services, HR Recruitment Processing
• Regulatory & Compliance Management: RPA can automate repetitive compliance tasks for regulatory flows as well as automating process controls. Blockchain can be used to create an immutable record of the regulatory events which can be accessed in case of internal or external audits. Example Use-Cases: Recording Customer Data Preferences (e.g., GDPR, CCPA), Compliance Audit Management (e.g., SOX)

Challenges and Opportunities

Both RPA and Blockchain are new technologies and are evolving at a different pace. That means, the implementation of RPA and Blockchain does not come without its challenges. For example, in these early days, Blockchain has constraints such as scalability, interoperability, and standardization which are pre-requisite for the enterprise adoption. Number of organizations are working to overcome these constraints. However, this coupled with regulatory uncertainty and governance issues have slowed down Blockchain adoption.

Many companies are not fully utilizing RPA as an enterprise transformation capability that scales across multiple business functions. These organizations are recognizing benefits from the use of digital labor, but their overall value proposition is diminished by not thinking strategically and not thinking big enough. Top management consulting firms like Alvarez and Marsal are spending more and more time helping clients build an RPA strategy and roadmap that is sustainable and drives ever-increasing benefits over time.

When picking a use-case for RPA and Blockchain strategy, it is important to carefully review an organization’s methodologies and understanding of technology. Many pilots have failed because the organization does not establish rigor around use-case selection. Pick a use-case that has a logical, repeatable processing and benefits from immutable records as a potential candidate for RPA + Blockchain pilot. Consider avoiding processes with huge volume of data due to scalability constraints of Blockchain in current state.

Finally, the success of digital transformation relies upon thinking through holistic requirements, clearly aligning to business goals, identifying key success metrics, and establishing strong governance. Spending time on analyzing the current operation model, designing a target state, and articulating process integration points before starting implementation is critical.

Looking Ahead

Automation is the journey to successful digital transformation, not the destination. The integration of technologies like RPA and Blockchain can certainly generate new powerful business models. Organizations can maximize long-term success by looking beyond individual technology silos and investing in holistic planning upfront.