When analyzing our daily operations, we realize that there is an opportunity cost involved and it is simply a matter of making the right choice. As managers and leaders, ignoring the need to automate or delaying the process will cause continued loss in revenue. This will prove to be a costly mistake, especially if those processes are highly repetitive in nature. Sometimes while prioritizing various initiatives, automation projects take a back seat. Such delaying leads to the continued risk of error and compliance associated with the underlying process along with the increasing cost of its manual processing which will outweigh the advantages of any other priorities.
Is automation a priority for you?
Business unit leaders and program managers driving process improvement across verticals should consider automation as a key priority and allocate the necessary resources and time. By identifying processes that need automation and prioritizing them, money can be saved from the start. In order to improvise the overall performance of the collection operations, leaders tend to go through expensive system migrations and realize only a 10 -15% improvement in their overall profits. This is because some of the processes handled are outside of the standard accounts receivable management software. By manually continuing to process these, there will be an increase in the operational cost irrespective of the software one chooses to use for their A/R management. It is important to have a detailed analysis of various processes and communicate the priorities with the software vendor about your aspiration of becoming a “digital-first” agency and having an automated environment with a long-term perspective of growth and scale. It is even better to have your automation partner as part of the software evaluation to ensure both the technology providers understand your expectation and work jointly to meet the goal of “full automation.”
Thinking “Automation First”
Every time a new process is introduced or any enhancement to an existing process is made, it is imperative to consider and design them with the goal to automate it either fully or partially. On average, every other process within the collection process – whether it is communicating with consumers or clients, account staging, payment processing, dispute management or call auditing – goes through some degree of transformation every year. Robotic process automation (RPA) can certainly help to accelerate these changes with a greater impact on the dollars saved. Most of the time, automation is considered as the second step and replacement of system is considered as the first step. Without considering automation, organizations might end up in a new system, but left with the same old process with sub-optimal output. The very approach of automation first allows leaders to set higher goals because handling volume is not a constraint. By removing the human component, they could very well contain the cost even if they scale.
Opportunity cost? How?
More than ever, the time to automate is now and with margins tapering, cost savings is a priority for every collection manager. According to the HIMSS, healthcare provider innovation survey, reducing the total cost of care is the first and foremost priority for healthcare providers and 88% of organizations in healthcare have set a cost reduction target. With margins reducing from approximately 25% in 2010 to around 13% in 2021, the operating margins is expected to be 7-11% or even less.
If sales is on-boarding new clients and bringing in new listings and you continue to expect human resource to add bodies in order to seize the opportunity and handle the volume and scale, it’s time to reconsider. This traditional approach is expensive and unsustainable. Through automation's, agencies can scale overnight with the RPA bots without significantly increasing their operating expense. During the pandemic volume surge, revenue cycle managers rushed to automate many of their processes and the ones who already had the robots were able to capture the new opportunities without any problem.