April 18, 2017      

Robotics process automation, or RPA, is all the talk among companies looking to optimize efficiency and improve quality in many back-office functions. The robots used in RPA are called “bots” and are more akin to a software program than to a futuristic machine with metal limbs. They are also notable for their collaborative attributes, working alongside and supporting people, rather than being designed exclusively to replace them.

At EY, we use hundreds of bots every day to perform predictable and repetitive tasks associated with rules-based activities, such as processing transactions, manipulating pre-existing data, and communicating with other digital systems. These are important but tedious tasks, and they are rather easily mimicked once a software configurator studies the motions and “interprets” the activity for computer application.

In short, RPA is possibly the best and most straightforward example of how advances in back-office robotics are taking the robot out of the human. For us, this means upskilling our high-performing professionals’ time to take on more interesting and value-added work on behalf of our clients.

Once your company has decided to implement bots in corporate functions — such as finance and accounting, tax, treasury, human resources, IT services, supply chain — you then face a number of other important decisions related to implementation. These include how to secure funding, choose the right software vendor, and develop work plan and a timeline.

While introducing RPA to the workplace requires minimal IT infrastructure changes, bots do need a home, a platform, a base from which to operate. That means you will need to select a place for them to reside from among a range of hosting options. Microsoft, Rackspace, and Amazon are among major players.

The pros and cons of four hosting platforms

Choosing the best vendor for your needs is an important decision and should be based on careful consideration of a number of critical success factors, such as the industry you are in, company size, and financial and human resources to be committed to implementation. You should also consider the level of control you need to exert over installation, operations, and backups.

I have not come across much guidance in this area. So, while there is no single right answer, I hope you will find the following considerations helpful:

1. Internal hosting

As its name implies, internal hosting refers to a company with its own dedicated hardware and bandwidth. Everything is operated and managed in-house, so the company provides the equipment, technology, and support. The system is self-sustaining.

Pros/strengths:

  • Company maintains tight control of the platform, including resources, location of data, and security policies.
  • Typically, this approach makes it easier to integrate older, legacy applications — and you have the confidence of knowing your bot is sitting behind the same firewall as your system.

Cons/weaknesses:

  • As with all platforms, the greater the control, the higher the investment costs — bots, like their human counterparts, require a dedicated workstation, and there’s other equipment and technology support to consider.
  • If your business is highly seasonal, this is probably not the best scalability choice for you. You can’t “rent” the equipment, so downtime is costly.
  • Uptime is typically less than with a third party.
  • Disaster recovery is costly as two separate locations must be maintained.

2. Unmanaged external hosting

There are two types of external hosting — managed and unmanaged. What they have in common is the purchase of hardware and bandwidth from a third-party provider. The differences come in post-purchase. With unmanaged external hosting, the third party provides initial equipment setup, but beyond that, all application setup and support are the responsibility of the customer.

While most external hosting choices are via the public cloud, this one does give companies the option of renting a private cloud. In this case, the hardware, storage, and network are dedicated to a single company. This is different from how it would work in the public cloud, where your computing environment would be shared with a number of other companies.

Pros/strengths:

  • Hosting companies have lots of equipment, so buyer realizes cost savings.
  • Scale up or down quickly — there’s no wait time for what you need from providers.
  • This arrangement also makes it easier to build-in disaster recovery, while still allowing your company to maintain tight control over most activities and data policies.

Cons/weaknesses:

  • Resource costs remain high, as purchaser is still supporting IT headcount, infrastructure, and overhead.
  • Could cause data privacy issues with some of your company’s customers because data is hosted with a third-party provider. Applicability depends on your industry and client requirements.

3. Managed external hosting

With managed external hosting, the third-party hosting provider is responsible for not only setting up the equipment, but also for varying levels of application support, patching, etc. This is a good match for companies that want or need to outsource the day-to-day management and maintenance of the servers to the hosting provider versus internal IT resources.

Pros/strengths:

  • Cost savings on hardware, headcount, and infrastructure support are significant.
  • Immediately scalable.
  • Easier to build in disaster recovery.

Cons/weaknesses:

  • Requires that a third party has access to your production environment — it can see sensitive data.
  • Resources are not dedicated, so there is limited control over them.

4. External hosting with an RPA vendor

This is cloud hosting that specializes in robotic process automation — it is a choice that is very specific to the use of robotics. This option provides simple-to-use interfaces allowing customers to quickly and easily respond to changes in demand (scaling) by adding/removing bots as required. It’s a good choice for any size company that doesn’t have in-house RPA experience or for whom seasonality or sporadic needs come into play.

Pros/strengths:

  • Highest level of flexibility and scalability for use of bots. For example, one provider allows customers to vary number of bots used on a day-by-day basis.
  • You only pay for what you use.
  • IT complexity is reduced for user, as the investment is in the expertise of vendors who specialize in these capabilities.
  • Could be highly suitable for organizations wanting only to use bots for a few particular processes, such as month-end closings or inventory.
  • No knowledge of RPA or IT is required.

Cons/weaknesses:

  • Additional cost above and beyond regular managed services.
  • Requires third-party vendor to have access not only to production environment but also potentially sensitive production data.

There is no single path to achieving the ideal hosting option, but, as you can see, depending on your industry, domain knowledge, experience, business size, and desired level of expenditure or control, there are ways to narrow the path that is best for your organization at this point in time.

External hosting pros and cons for RPAThe views expressed here are those of the author and do not necessarily reflect the views of Ernst & Young LLP or any member firm of the Global EY organization.