Uh Oh: Robotic Process Automation Is Moving Beyond Simple, Repeatable Tasks

And we thought our ability to think provided job security. JL

Rolfe Winkler reports in the Wall Street Journal:

Software robots perform jobs like data entry, such as opening a pdf file attached to an email, scanning the document, and entering the information in some other database. Higher-order artificial-intelligence software can learn when presented with new data and make decisions without human input, such as determining whether to underwrite an insurance policy. The market is growing because chief information officers can show their bosses real cost savings using bots to complete tasks faster, more cheaply and with lower error rates
After years toiling in obscurity, three startups have suddenly hit the jackpot in a corner of the enterprise-software market sprinkled with artificial intelligence. Now they are racing to one-up each other to appear the market leader.

The companies are UiPath Inc., Blue Prism Group PLC and Automation Anywhere Inc. They were all founded in 2005 or earlier, but it wasn’t until the past few years that they took off after hitting on their current business automating simple back-office tasks and dubbing it “robotic process automation.”
UiPath on Monday completed a new funding round at a $3 billion valuation, said a person familiar with the process, six months after a prior round valued it at $1.1 billion. In July, rival Automation Anywhere raised its first round of financing at a $1.8 billion valuation. Shares in Blue Prism, a public company in the U.K., have risen nearly 30 times since they were listed in March 2016. It raised about $60 million in a secondary share sale in January.
Together, the companies have raised nearly $700 million this year as they sprint to open offices around the globe.
At stake is leadership in the market for so-called software robots that mimic humans to complete mundane back-office tasks such as entering invoice information into company databases, processing insurance claims or automatically sending out offer letters to new hires.
The market will grow to almost $1.1 billion in revenue this year from $325 million in 2016, estimates Craig Le Clair, analyst at research firm Forrester. While a handful of other companies compete in the sector, UiPath, Blue Prism, and Automation Anywhere dominate it, he said. But that isn’t enough to justify their huge valuations, he said.
The soaring valuations reflect in part the buzz over artificial intelligence, or AI, which has benefited the three companies even though their software doesn’t precisely fall in that category.
Higher-order artificial-intelligence software can learn when presented with new data and make decisions without human input, such as monitoring credit-card charges for fraud, or determining whether to underwrite an insurance policy, Mr. Le Clair said.
With robotic process automation, humans train the software robots to perform simple, repeatable jobs like data entry that today are handled by humans, such as opening a pdf file attached to an email, scanning the document for specific information, and then entering the information in some other company database where it needs to be stored.
The market took years to develop as the companies improved their software to make it ready for big corporate customers. A dash of marketing magic helped too, after Blue Prism used the word “robotic” to describe this type of software, giving it the scent of AI. “AI makes it sexier for companies to think about automation,” said UiPath Chief Executive Daniel Dines, who co-founded the company in Romania in 2005.
The market for robotic process automation is growing quickly because chief information officers can show their bosses real cost savings by using bots to complete clerical tasks faster, more cheaply and with lower error rates. UiPath’s bots cost 20% to 33% of a human clerical worker and can complete 3-4 times the work, said Jairo Quiros, vice president of global shared services at Equifax Inc., one of the company’s customers.
Mr. Dines declined to provide annual financial figures, but said UiPath by the end of this year will be generating revenue at a rate of $200 million annually, compared with $43 million at the end of last year, and just $3 million a year earlier. Customers include General Electric Co. , Walmart Inc., and Chevron Corp.
Rapid growth is exciting big-name investors. Sequoia Capital and CapitalG co-led UiPath’s latest funding, a $225 million round bringing the company’s total raised to just over $400 million, after investments from Earlybird Ventures and Accel Partners. CapitalG is one of the investing arms of Alphabet Inc.
Blue Prism reported revenue of £22.9 million ($29.9 million) for the six months ended in April, up 145% from a year earlier. Its customers include Coca-Cola Co. Automation Anywhere hasn’t disclosed revenue figures. New Enterprise Associates led its $250 million funding round in July.
Still, whether the companies can live up to their skyrocketing hype, say analysts and investors, might come down to whether they can move beyond simple software for repeatable tasks and morph into hubs that help other software companies sell more sophisticated AI to corporations.
There is “no real software magic” behind the companies’ popular products said Erik Dorr, vice president of research at consulting firm The Hackett Group , another reason they need to move quickly.