KAS Bank Case Study Final

Assignment 1: Submitted to Dr Michael Shumanov

Mohammd Abdullah Butt (103822650) 8/27/23 INF80014

1 Case Study Robotic Process Automation

KAS Bank’s Journey to Adaptation of RPA (Robotic Process Automation)

Table of contents:

1 Executive Summary 2

1.1 Introduction 3

1.2 Keywords 3

2 Introduction to Robotic Process Automation (RPA) 3

2.1 Robotics enable the liberation of human labor for more strategic endeavors 5

2.2 State of the RPA Market in 2016 6

3 KAS Bank Journey 7

4 Pursuing an RPA Solution in 2016 8

5 Challenges to RPA in KAS Bank 9

6 Conclusion 11

7 References 12
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Abbreviations:

RPA: Robotic Process Imaging

KPMG: Klynveld Peat Marwick Goerdeler
ROI: Return on Investment
CIO: Chief Information Officer

1. Executive Summary:

The advent of robotic process automation (RPA) has ushered in a novel dimension of human
engagement with automated entities, known as bots. On the other hand, potential benefits of
RPA have been globally debated, reports suggest that many organizations grapple with realizing
the full advantages of this technology. Evidently the interactions among humans and robots do
not uniformly culminate in anticipated remarkable gains and improved services. Nevertheless,
the precise nature of these human-bot interactions and the subsequent human perceptions
remain somewhat opaque.

Centered around a comprehensive case analysis conducted in the Dutch Bank (KAS) Premises,
this assignment elucidates distinct defiance encountered by human participants within such
interactions. Subsequently, we delve into the perspectives that humans develop concerning bots
and their aptitude for task execution. In response to these insights, we proffer a curated
collection of key practices, strategically tailored to effectively manage the intricate interactions
that transpire between human agents and bots.
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1.1. Introduction:
This study is driven by the following inquiries:

a) An illustration of historical review of the RPA market state as in 2016. And an analysis
of assessing the fact that is it a wise decision to pursue 2016 solution based on market
research of RPA 2016?

b) Are the bots programmed as a great success to Board members? If yes than why?

c) How many obstacles KAS bank overcome during their entire RPA process?

d) Which measures were implemented to reduce the potential risks and difficulties linked
to introducing RPA at KAS Bank, and did these strategies prove to be effective?

e) What guidance would you offer the Chief Information Officer (CIO) concerning the
existing challenges and the future direction of the RPA initiative at KAS Bank?

1.2. Keywords: KAS Bank, RPA, CIO, challenges, bots programme, software

2. Introduction to Robotic Process Automation (RPA):

Robotic Process Automation (RPA) is a burgeoning technological advancement centered on

creating software robots, commonly referred to as bots, which emulate human actions. The
transition to RPA underscores enterprises' aspirations to curtail labor expenses, enhance
productivity, minimize error rates, and elevate customer satisfaction. With the global rise in
average labor costs (Doguc, Ozge. 2020). Businesses have rapidly embraced RPA technology in
recent years. Indeed, RPA has emerged as a pivotal trend in various sectors.

In essence, RPA constitutes a system designed to automate business processes through the
amalgamation of business logic and user inputs. RPA applications equip users with tools to
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conceptualize robots, or bots, capable of replicating their interactions with applications. These
interactions encompass tasks such as processing transactions, manipulating data, instigating
responses, and interfacing with other digital systems (Boulton, 2018). A notable Trecento report
postulates that automation technologies, including RPA, hold the potential to yield a substantial
economic impact, projecting a value of $6.7 trillion by the year 2025.

In an era where digital technologies wield significant influence over industry competitiveness,
the task of anticipating the trajectory of potentially transformative technologies has become
imperative for business leaders who seek the sustained survival and prosperity of their
organizations (Krotov, 2019). Over recent years, the prominence of digital technologies in
achieving organizational objectives has grown rapidly. The application of advanced digital
technologies has the power to reshape the business models, products, processes, and
organizational frameworks of entities. This transformative phenomenon is termed "digital
transformation," a phenomenon that reshapes individual enterprises and entire industries alike.

Initially, the concept of digital transformation primarily revolved around production processes,
with physical robots supporting human involvement in manufacturing tasks. During the early
stages of the digital transformation era, the focus predominantly lay on enhancing customer
service quality. In the present context, there's an increasing emphasis on the digitization of
operational and business processes. The concept of digitization now extends to service-oriented
enterprises, notably encompassing industries such as finance, banking, insurance, marketing,
accounting, public administration, and logistics.

Despite the name, Robotic Process Automation does not involve physical robots performing tasks
in office settings. Instead, it's fundamentally a software-driven solution wherein the software
"robot" undertakes tasks previously executed by humans. The following chapter elaborates on
the intricate nuances of this concept.

The market value of RPA has exhibited consistent growth over the years, with projections
indicating further expansion. For instance, Forrester forecasted that by 2021, over four million
robots would be deployed for office tasks. Furthermore, these forecasts suggested that the RPA
market would ascend to USD 2.9 billion by 2021, surging from USD 250 million in 2016 (Le Clair,
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2018). Gartner highlighted RPA as the swiftest-growing segment in the global enterprise software
market and anticipated the global RPA services market to reach an estimated EUR 7 billion in
2020 (Gartner, 2017). This sector currently represents the most rapidly progressing segment of
the global software market. According to Information Services Group (2018), 54% of European
enterprises intend to automate a minimum of ten processes using RPA by 2020. The expansion
of the RPA industry is propelled by digital business demands, as organizations strive for seamless,
"straight-through" processing.

2.1. Robotics enable the liberation of human labor for more strategic endeavors:

Through uncomplicated robotics, incumbent manual processes and tasks are supplanted by
software. This mechanism becomes particularly relevant when repetitive actions, consistently
executed across various systems, necessitate a solution. In such instances, robots step in,
adhering to a predefined workflow while effectively utilizing existing systems and data resources.

For instance, when confronted with a task like modifying an employee's cost center, the robot
can proficiently extract data from a form and input it into the HR system. It can then extract
address information from Google Maps, compute travel distance, update the HR or Financial
system accordingly, and even adjust reimbursements as needed. Ideally, prior to automation, the
process is streamlined to ensure optimal functionality.

Remarkably, this process incurs minimal expenditure as the primary investment revolves around
software deployment. Additionally, robots possess enduring attributes – they function
ceaselessly, are impervious to fatigue or illness, and consistently deliver precise outcomes. Case
studies have demonstrated a notable 55% enhancement in process efficiency (KPMG, 2017-3)
through the integration of robotics. By delegating routine tasks to robots, human resources are
liberated to concentrate on more strategic pursuits, such as pioneering product development.
6 Case Study Robotic Process Automation

The evolution of robotics remains an ongoing endeavor, characterized by continuous progress.

Beyond basic robotic systems, cognitive robots represent a notable advancement, possessing the
capacity to assimilate knowledge from human interactions and subsequently apply that acquired
understanding. These self-educating robots can also glean insights from the extensive
repositories of information often found in content management systems, such as SharePoint,
intranet, and the internet.

2.2. State of the RPA Market in 2016:

In 2016, the Robotic Process Automation (RPA) market was still in its relatively early stages, but
it was showing signs of growth and potential. Here's a historical review of the state of the RPA
market in 2016:

1. Emergence of RPA: RPA had started gaining attention as a technology that could
automate routine and rule-based tasks traditionally performed by humans. Organizations
were intrigued by the prospect of reducing costs, increasing efficiency, and minimizing
errors through automation.

2. Early Adoption: While RPA was still relatively new, some forward-thinking
organizations were beginning to experiment with RPA solutions. Industries such as
finance, banking, insurance, and telecommunications were among the early adopters due
to their heavy reliance on data entry, reconciliation, and other repetitive tasks.

3. Vendor Landscape: The RPA vendor landscape was growing, with a few key players
offering RPA tools and platforms. Companies like UiPath, Blue Prism, and Automation
Anywhere were emerging as leaders in the space.

4. Use Cases: Organizations were primarily using RPA for tasks like data entry, invoice
processing, report generation, and data migration. These tasks were time-consuming,
prone to errors, and required minimal decision-making.
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5. Benefits and Challenges: The benefits of RPA were becoming evident, including
improved accuracy, increased speed, and the ability to free up human employees for
more value-added tasks. However, challenges such as integration with legacy systems,
change management, and ensuring data security were also being recognized.

6. Awareness and Education: In 2016, many organizations were still in the process of
understanding what RPA was and how it could fit into their operations. Awareness and
education efforts were underway to help businesses grasp the potential and limitations
of the technology.

3. KAS Bank Journey:

Established in 1806, KAS Bank stands as an independent Dutch financial institution with a
formidable reputation. The bank has garnered recognition as a prominent purveyor of custodial
and fund administration services across Europe, catering bespoke financial solutions to large-
scale investors and financial institutions. In reaction to evolving global dynamics, KAS Bank took
a strategic step in 2014 by initiating a comprehensive cost reduction initiative aimed at mitigating
operational expenses. A LEAN program was introduced, with the principal objective of
rationalizing and simplifying the bank's financial operations. However, the outcomes of this
endeavor fell short of achieving the desired cost reduction targets.

Benefitting from the collaboration with KPMG, KAS BANK instigated a comprehensive process
encompassing supplier and tool selection. This encompassed the formulation of the business
case, development, and issuance of the Request for Proposal (RFP), a meticulous short-listing
process, rigorous evaluation, and eventual contract finalization. Following the meticulous
selection, the chosen Robotic Process Automation (RPA) tool was utilized for programming,
paving the way for the phased implementation of RPA.

To ensure the durability and effectiveness of this implementation, measures were undertaken to
establish an RPA Center of Excellence. Moreover, the augmentation of proficiency extended to
encompass training initiatives focused on both the RPA tool and the associated processes. These
8 Case Study Robotic Process Automation

capacity-building efforts were thoughtfully extended to encompass team members from both
within the bank and its collaborative IT services partner.

Consequently, in pursuit of enhanced efficacy, KAS Bank made the decision to outsource a
selection of its IT functions to an external service provider. This setup involved the relocation of
both staff and IT resources. The success of this sourcing out venture was evidenced by notable
cost reductions and the introduction of adaptable pricing structures, including a "pay per use"
model. Encouraged by these achievements, the bank's leadership embarked on a quest to further
explore avenues for attaining cost efficiencies.

In 2016, KAS Bank's operations division took a pivotal stride by introducing the Robotic Process
Automation (RPA) program. This journey into RPA was initiated with a focus on automating
standardized processes. The identification and evaluation of candidate processes underwent a
two-step analysis. Firstly, four primary criteria were employed to gauge the suitability of
processes for inclusion in the RPA initiative. These criteria revolved around factors such as the
process's transactional nature, its routine-based characteristics, the presence of repetitive tasks,
and the level of process complexity (standardization). Subsequently, a secondary step involved
the use of three key considerations to assign scores related to feasibility, influence on service
excellence, and impact on customer relationship management.

4. Pursuing an RPA Solution in 2016:

Based on the market analysis as of 2016, pursuing an RPA solution could indeed have been a
correct decision for many organizations, especially those grappling with repetitive and manual
processes. The early signs of RPA's benefits were visible, and companies that recognized the
potential were gaining a competitive edge. However, certain factors needed consideration:

1. Fit for Processes: Organizations needed to assess whether their processes were
suitable for automation. Processes that were highly repetitive, rule-based, and involved
minimal decision-making were ideal candidates.
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2. Long-Term Strategy: Pursuing RPA should have aligned with an organization's long-
term strategy. RPA was not a one-size-fits-all solution, and its implementation required a
clear understanding of how it would contribute to business goals.

3. Change Management: Implementing RPA often required changes in processes, roles,

and responsibilities. Organizations needed to be prepared for these changes and ensure
that employees were onboarded effectively.

4. Vendor Selection: Choosing the right RPA vendor was crucial. Vendors' capabilities,
scalability, security features, and compatibility with existing systems were important
factors to consider.

5. ROI Expectations: While RPA promised significant benefits, organizations needed to

have realistic expectations about the return on investment and the time it would take to
achieve it.

Looking back, opting for an RPA solution in 2016 was a sound choice for entities such as
KAS Bank, looking to automate manual and repetitive processes. However, each
organization's context, industry, and specific challenges would have influenced whether
RPA was the correct choice for them at that time. Presenting RPA bots as a success to the
executive board is possible and can be an effective way to showcase the positive
outcomes and return on investment that the organization has achieved through
automation. Here's how they might approach presenting RPA bots as a success to the
executive board:

• Quantify Benefits
• Before-and-After Comparison
• ROI Analysis
• Efficiency Gains
• Error Reduction
• Scalability and Flexibility
• Employee Empowerment
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• Future Potential
• Interactive Demo
• Cost-Benefit Analysis
• Feedback from Stakeholders

5. Challenges to RPA Adaption in KAS Bank:

While scholarly literature and practical insights have extensively covered the advantages of
employing Robotic Process Automation (RPA). The obstacles linked to the transparency of bots'
actions and the subsequent human response have remained unexplored to date. Our
comprehensive analysis of KAS Bank's bot implementation reveals the emergence of three critical
challenges concerning visibility. These challenges have consequently posed difficulties for
individuals operating within the realm of software bots. In the subsequent discussion, we delve
into these three facets of visibility (Willcocks, L. P. and Lacity, M.C, 2016)

Drawing from the extensive interviews conducted at KAS Bank, a noteworthy observation
surfaced: employees encountered challenges in grasping the concept of bots. Specifically, a series
of inquiries emerged from employees, including the nature of bots, their operational mechanics,
the potential contributions to the organization, and their capability to take on employee
responsibilities. These queries closely align with the investigation conducted by Moffitt, K. C.,
Rozario, A.M., and Vasarhelyi, M.A., 2018 which explored the essence of Robotic Process
Automation (RPA) and its ramifications within financial processes. We categorize this
predicament as the "visibility challenge," referring to employees' limited familiarity with the bot
concept.

“During the start of the program employees were skeptical as they did not believe that their skills
and experience could be copied by a software program. The idea that bots do exact the same
things as humans do was not accepted: they did not believe that it could work.” (Source: software
programmer).
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“Various employees did not understand how the robot works and what type of tasks are
conducted. We learned that we have to explain how bots work and how they fit into a business
process.” (Source: process designer).

In KAS Bank's endeavor to elucidate the operational mechanism of bots, employees were
apprised of the fundamental reality that a bot essentially constitutes a software program. Further
clarification was offered that the IT department would be responsible for coding business rules
into the software bot. This necessitated process managers to initially outline the tasks inherent
within the business process. Consequently, a software programmer from the IT department could
proceed to configure the bot, thereby translating the process descriptions into programmable
rules. Through this cohesive collaboration, employees acquired a more comprehensive grasp of
the synergistic relationship between human agents and bots, thereby fostering enhanced clarity
on their combined functioning.

Further expected challenges that an organization like KAS Bank might have faced while adapting
RPA can be as follows:

• Process Identification and Prioritization

• Resistance to Change
• Integration with Legacy Systems
• Data Security and Compliance
• Scalability Challenges
• Technical Challenges
• Error Handling and Exception Management
• Maintenance and Updates
• ROI Measurement
• Lack of Skills and Expertise
• Vendor Lock-In
• Regulatory Challenges
• Cultural Shift
• Choosing the Right Tools
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6. Conclusion:

The introduction of software-driven robotic solutions into the operational fabric introduces a
distinct set of organizational complexities specifically in KAS Bank’s Journey to RPA. We
specifically dissect notable challenges confronted by KAS Bank during the implementation of a
bot program. Drawing upon empirically derived evidence, we proffer a comprehensive array of
best practices. These practices serve as a pragmatic toolkit for organizations, enabling them to
cultivate a judicious perspective regarding the potential and constraints inherent in bot
functionality. This, in turn, fosters active and constructive human participation in tandem with
automated bot processes.

7. References:

➢ Boulton, C. (2018, September 3). What is RPA? A revolution in business process

automation. Retrieved from CIO from IDG:
https://www.cio.com/article/3236451/business-process-management/what-is-
rpa-robotic-process-automation-explained.html
➢ Doguc, Ozge. (2020). Robot Process Automation (RPA) and Its Future.
10.4018/978-1-7998-1125-1.ch021.
➢ KPMG, Accelerating Automation: plan your faster, smoother journey, KPMG
International, 2017
➢ Krotov, V. (2019). Predicting the Future of Disruptive Technologies: The Method
of Alternative Histories. Harvard Business Publishing
➢ Le Clair, C. (2018). The Forrester WaveTM: robotic process automation. Forrester
Willcocks, L. P. and Lacity, M.C.: Service automation robots and the future of work.
SB Publishing, Ashford, UK (2016)
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➢ Moffitt, K. C., Rozario, A.M., and Vasarhelyi, M.A.: Robotic Process Automation for
Auditing. J. of Emer. Tech. in Acc., 15, 1, 1-10 (2018)
➢ Tornbohm, C., & Dunie, R. (2017). Market Guide for Robotic Process Automation
Software, Gartner, Stamford. Retrieved from https://www.gartner.com/en/
documents/3835771/market-guide-for-robotic-process-automation-software