NelsonHall recently spoke with management from Virtual Operations, a privately held Dallas, TX-based provider of consulting, implementation and technical services around robotic process automation (RPA).  The company was founded in 2012 by Dan Hudson and Matt Smith who had previously worked together at OnTarget Partners and other ventures.  We asked them about the growth that they are seeing in RPA.

Client engagements with Virtual Operations typically start with classic consultancy around RPA technologies; this typically involves making a business case for RPA.  In some cases, RPA processes are run for the client, at least initially, before the client takes over.  Blue Prism is frequently engaged as a software and delivery partner, though Virtual Operations is vendor neutral. In the  last two years, Virtual Operations has conducted 24 implementations. Some of these have been for large firms, with a subset in the BPO market.  Of 24 installations, to date, the client base is split approximately in thirds across healthcare (with an RCM and claims processing focus), financial services and F&A/HRO.

For BPO providers, value can be recognized very quickly given the speed at which virtual FTEs (robots) can be configured and implemented. For example, after a recent, small (~$20k) proof of concept engagement, a BPO client signed on to replace ~800 of its 1,000 FTEs in its order management shared services centers with ~150 virtual FTEs.  Immediate and meaningful business benefit to the client was realized.  The implementation touched approximately 18 different applications across 9 service centers and progressed from concept to live implementation in about 200 days.  Gains in productivity have averaged 3-5x across applications with low (under 5%) error rates.  For the client, the massive gain in productivity in the relatively short time and small sum of capital invested stood in meaningful contrast to longer and more expensive and cumbersome deployment models on the order of months or quarters.

In the healthcare space, Virtual Operations has been engaged by healthcare providers for records creation and revenue cycle management (RCM) processes and by insurers for claims pricing and prior authorizations processes. One healthcare provider recently contracted Virtual Operations to implement an improved records system, as several new healthcare records needed to be created manually whenever an intervention was provisioned.  Creating a patient record was thus a very laborious process that required many touch points across the employee base. Virtual Operations found that many elements of the process could be automated to improve the efficiency of healthcare delivery upon admission and also provide more clarity around payer capacity. If, for example, it could be identified by the record system that a patient needed to provide a larger co-pay for services upon admission, it benefits the provider’s collections process to notify the patient that payment was due up front rather than chasing the collection after patient discharge.

In RCM, some HIPAA-related regulations encourage RPA, as they require that operations be retained onshore when such work might have previously been pushed offshore. While it may have previously been difficult to justify technology investments in RPA, there is now encouragement and pressure to reduce administration costs, and, in many cases, to do so with onshore resources, which can encourage the use of robotics.

In addition to brief implementation periods and jumps in productivity, RPA also enables businesses to achieve high utilization rates by using robotic assets, as the assets are not necessarily relegated to a single process.  In healthcare, for example, batch records creation and prior authorizations can be completed overnight to enable efficient admission and treatment upon patient arrivals in the morning.  In this way, employing a platform approach to automation that is flexible to addressing the client’s specific needs is more valuable than simply reducing costs through FTE reduction.

Also relevant to healthcare is that RPA does not require process or system re-engineering to be effective.  Several legacy systems, especially in healthcare, are running processes that are not optimized for efficiency but it is necessary to retain the structure of those processes and systems for regulatory compliance or other reasons.  Even if the process itself cannot be changed, RPA can be helpful in simply automating the process and reducing errors significantly, thereby improving overall performance.  The improvements in data accuracy and time required to perform various tasks can be well worth the time and expense required for implementation.

Virtual Operations is seeing rising interest in RPA as a platform.  One of the questions that Virtual Operations is frequently asked is “What can it do?”  The reality, according to founder Dan Hudson, is that as long as the data in question is structured and the process to be executed is rules-based and repeatable, RPA can be configured for that specific application. 

Healthcare BPO is one of the areas in BPO where we see strong potential for RPA to serve as a platform tool for its flexibility, scalability and the jumps in productivity that it enables, all at meaningfully low error rates.