By now, everyone knows that COVID-19 all but shut down the airline industry. Airline share prices fell off a cliff. Major carriers like American Airlines (AAL) and Delta (DAL) lost half their value in just a few weeks.
But most people don’t know about the chaos that unfolded behind the scenes. According to consulting firm Forrester, one major airline received more than 120,000 cancellation requests during the first few weeks of the pandemic.
As you can imagine, this is a nightmare to deal with. Each request takes three to four minutes to process. So, we’re talking at least 6,000 manhours of work. Naturally, customers want their refunds fast, so time was of the essence.
To deal with this flood of cancellations, the airline turned to cutting-edge technology: robotic process automation (RPA). In short, the airline built an RPA “bot” in just six days. This bot was able to address 80% of the airline’s cancellation requests, or about 4,000 per day!
Most people haven’t heard of RPA. That’s because it’s relatively new. It’s also not an easy technology to invest in. But as I’ll show you, that’s going to change very soon.
The Potential to Impact Every Industry on the Planet
In a nutshell, RPA is the use of computers, or “bots,” to perform work that humans would normally perform. An RPA bot can read and understand documents, it can perform data entry, and it can process items like invoices.
In other words, while artificial intelligence (AI) uses computers to think, RPA uses computers to carry out tasks. Companies love RPA because it saves them money and makes them more efficient. Robots, after all, are often cheaper than human workers.
Computers also don’t make mistakes when they’re tired, distracted, or unmotivated. Employees like RPA because it means they don’t have to perform mundane tasks. Instead, they can focus on more meaningful work like interacting with customers.
Another beauty of RPA is that it doesn’t require companies to rip out legacy systems. It works on top of existing software. That makes it much easier and quicker for companies to adopt it.
Earlier, I mentioned how an airline built an RPA bot to address 80% of the airline’s cancellation requests, about 4,000 per day. That amount of work would normally require about 200 full-time employees! Not only that, this RPA solution costs 30% of what it would have cost to hire new workers.
Now, I realize that bots performing repetitive tasks isn’t as sexy as AI, edge computing, the internet of things (IoT), genomics, or some of the hot megatrends today.
But that’s no reason to ignore this opportunity. RPA has the potential to impact every industry on the planet.
Practically, every profession in the world involves repetitive tasks. And in almost every case, a computer would do a much better job of carrying out these tasks. The possibilities of RPA are truly endless.
So, it shouldn’t come as a surprise that a growing number of companies are adopting RPA. For instance, “Big Four” accounting firm Deloitte has used RPA to redesign its claims process. Its RPA solution can handle 1.5 million requests per year.
And get this: Deloitte built its bots in just 10 weeks. That’s a fraction of the time it would normally take a company the size of Deloitte to introduce a new software solution. I could go on and on with examples like this. But you get the point.
RPA Is Rapidly Going Mainstream
According to leading research firm Gartner, the RPA market grew over 63% in 2018. That made it the fastest-growing enterprise software category! Gartner expects the RPA market to triple in size between 2018 and 2024. But even that number likely understates the growth potential of RPA.
I say this because, like many other megatrends, COVID-19 has accelerated RPA adoption. By the end of 2022, 85% of large organizations will have deployed some form of RPA. Although, adoption of RPA is likely accelerating even faster than analysts project.
Forrester Consulting found that 31% of organizations have increased their spending on RPA in the past three months. And 48% of organizations said they plan to increase their spending on RPA in the next year. By the end of 2022, 85% of large organizations will have deployed some form of RPA.
This is one megatrend that needs to be on every investor’s radar.
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Justin Spittler is the senior analyst at Risk Hedge and a regular contributor to the RiskHedge Report.
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