What is intelligent automation?

Intelligent automation IPA
Updated on September 21th, 2023
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Intelligent Process Automation (IPA) refers to a new generation of tools, based on cognitive technologies derived from Artificial Intelligence, that enable the automation of complex processes. This cutting-edge technology is being widely deployed in companies to boost their efficiency and productivity while reducing costs.

The definition of intelligent automation

Management consulting firm McKinsey defines Intelligent Process Automation (IPA) as "an emerging set of new technologies that combines fundamental process redesign with robotic process automation and machine learning. It is a suite of business-process improvements and next-generation tools that assists the knowledge worker by removing repetitive, replicable, and routine tasks. And it can radically improve customer journeys by simplifying interactions and speeding up processes."

Intelligent Process Automation, also known as cognitive automation, relies on Robotic Process Automation (RPA) technologies and various branches of Artificial Intelligence (AI), such as Machine Learning, Deep Learning, advanced analytics, natural language processing, and others.

The combination of these major technologies allows for the creation of autonomous systems capable of analysing data, making decisions, and interacting with their environment. They can be applied to all company levels, from stock management to customer service.

Thus, the aim is to automate non-routine tasks that require a certain degree of thinking. Intelligent automation can be applied to a wide range of processes within a company:

  • Aggregation and/or re-entry of data;
  • Managing data flows following analytical rules;
  • Creating and sending communications;
  • Updating information from multiple systems;
  • Analysing services;
  • And more.

Intelligent automation, beyond RPA

As Robotic Process Automation (RPA) has already become an integral part of companies' digital transformation, intelligent automation is still in its early stages. However, this technology combines the best of both worlds with RPA and AI, enabling both action and reflection, and taking efficiency and performance even further for the entire company.

By definition, Robotic Process Automation (RPA) involves using robots to automate and optimise repetitive and time-consuming tasks, so-called "routine" tasks, performed on computer software. These tools require structured data and standardised rules, but cannot handle exceptions.

Intelligent automation solutions, on the other hand, can process semi-structured data (procurement orders, invoices, etc.) as well as unstructured data (voice messages, emails, etc.), while learning from human observation. In this way, an intelligent automation solution can not only mimic tasks performed by humans, but also learn to perform them even better.

These solutions allow for automation and improvement of more complex processes, even exceptional tasks that require intuition, discernment, or even more, creativity. Certain robot software can even be fully controlled by self-learning and perform advanced predictive analyses or integrate decision-making functionalities, for example.

Practical examples of intelligent automation

To better understand the role of intelligent process automation, we can imagine several scenarios being implemented within procurement departments.

Request management

A chatbot based on Open AI's ChatGPT technology, for example, is ideal for communication. It can analyse the meaning of questions and/or attribute sentiment to its interlocutor (customer satisfaction, anger, etc.), while providing more relevant responses and transferring specific cases to a human. Such a tool can be useful for answering supplier queries or for providing clarification on information requests, quotes, or price requests (RFI, RFQ or RFP).

Document management

A robot can classify incoming documents according to a defined process, but can also observe human behaviour and deduce other specific rules. For example, files sent by certain interlocutors can be automatically stored on a shared server, while certain elements (e.g. bank details, order forms) can be isolated and processed separately within the same document.

Year-End Rebate (YER) management

In the same way, IPA can assist procurement teams with managing year-end rebates (YER) from suppliers. The intelligent automation solution can analyse expenditures, identify suppliers with applicable rebates, submit claims, and monitor processing. This represents a significant time-saving, equivalent to several hours per supplier.

Risk management

Intelligent automation solutions can also be incorporated into predictive supplier risk monitoring and provide useful insights. They can identify early warning signals and proactively implement appropriate measures within the company.

These examples can also be extended to an invoice processing platform, contract management, negotiation, tendering, supplier management, etc. The range of possibilities is vast, and the corporate benefits are numerous.

The benefits of intelligent automation

To begin with, intelligent process automation represents a tremendous lever for cost savings. In addition to operating 24 hours a day and 7 days a week, these resources efficiently and accurately handle tasks. Companies, therefore, reduce labour costs, boost productivity, reduce human errors, and speed up processes.

According to McKinsey, companies in all sectors that have experimented with intelligent automation solutions have achieved impressive results: 

  • Automation of 50 to 70% of tasks;
  • Efficiency gains of 20 to 35% on annual operational costs;
  • Reduction in processing time by 50 to 60%;
  • Return on investment often reaching three-digit figures.

This technology also lightens the workload of repetitive and low-value-added tasks for teams, allowing them to focus on more interesting missions requiring genuine thought and/or a certain level of creativity, such as supplier relationship management, support for internal clients, building company strategy, digital transformation, and more. This contributes to improving their daily work and fostering their fulfilment within the company.

Ultimately, intelligent process automation assists buyers in completing specific tasks and improving working methods, offering real added value. It is a powerful resource for companies, allowing them to accelerate their digital transformation and gain competitiveness and agility throughout their operations.

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