Robotic process automation in the Middle East - A USD 1 billion opportunity for the region to leapfrog ahead in operational excellence

1. Robotic process automation in the Middle East
A USD 1 billion opportunity for the region to leapfrog
ahead in operational excellence
October 2018

2. Management summary
The Middle East has become well aware that it can no
longer rely solely on its wealth from natural resources.
With return on equity rates falling, many companies are
looking for expansion and diversification opportunities
– or ways to increase efficiency.
Robotic process automation (RPA) represents a promis-
ing solution to increase corporate efficiency, particular-
ly in a region where many corporate processes are still
performed manually. For the publicly listed companies
across the Gulf Cooperation Council countries, we esti-
mate the value of this efficiency opportunity to be in the
magnitude of at least USD 1 billion per year.
But besides savings, RPA offers a wide range of addi-
tional benefits. Apart from payback periods of less
than 12 months, the technology is flexible, scalable
and easy to implement. It can also improve customer
satisfaction, process control, quality assurance and
regulatory compliance and provide scalability and flex-
ibility. In this paper, we outline the RPA opportunity
for the Middle East, its potential benefits for compa-
nies in the region, and a suggested roadmap for suc-
cessful implementation.
USD ~ 1 bn
Estimated improvement
potential from efficiency
gains through RPA solu-
tions across the 820 publicly
listed firms in the GCC1
Up to 40%
Average estimated
cost savings potential in
overhead functions
through RPA solutions2
<12 months
Average payback period
of RPA implementation –
depending on the com-
plexity of the robotized
processes
1
Savings calculation based on average estimated RPA potential in 820 publicly listed companies in the Gulf Cooperation Council (GCC)
region. The calculation for the 820 firms assumes that an estimated average of 20% in efficiency can be realized in core corporate
functions in the headquarters (e.g. Accounting, Procurement, HR, Finance, etc.) leading to approx. efficiency potential of USD 1.2 m
at an average size of GCC headquarters. This estimate purposefully neglects the RPA savings potential in operational business units as
well as the savings potential for non-listed companies as well as governmental entities in order to offer a conservative assessment.
2
Source: RB project experience as well as interviews with RPA developers in the Middle East
2 Roland Berger Focus – Robotic process automation in the Middle East

3. Contents
1. The question is not if, but when ............................................................................................4
Robotization is quickly gaining ground in the Middle East
2. RPA has a vast range of benefits ..........................................................................................5
It cuts costs, is easy to implement and enhances customer satisfaction
3. A roadmap for implementation .............................................................................................9
Integrating RPA requires a structured approach and thorough preparation
Coverphoto:MennovanDijk/iStock;FrankRamspott/iStock
Robotic Process Automation in the Middle East – Roland Berger Focus 3

4. The Middle East is currently going through a period of
economic change. Over recent years, with lower oil prices
constituting a new normal it has become even more evi-
dent than before that the region can no longer rely solely
on its wealth from natural resources, but has to continue
with diversifying its economies.
The challenging environment has left its mark on the
profitability of many companies in the Gulf Cooperation
Council (GCC) countries. An analysis of more than 350
publicly listed GCC companies3
indicates that average re-
turn on equity has fallen by 36 percent in 4 years, from
approx. 11 percent in 2013 to 7 percent in 2017 on average
– a development evident across industries. Many Middle
Eastern companies have had to initiate steps to counter-
act this development, including the implementation of
cost-cutting initiatives.
Robotic process automation (RPA) is a relatively new
automation method that has the power to automate re-
petitive tasks that require a high amount of manual ef-
fort. The technology can be implemented within 12 to 18
weeks, from the initial idea of implementation to the go-
live of the first RPA solution.
Especially in the Middle East, where a high propor-
tion of processes are still performed with only limited or
no system support at all, RPA has great potential to in-
crease corporate efficiency. We have estimated the im-
provement opportunity for companies in the Middle East
to be in the order of magnitude of USD 1 billion per year.
The estimate of USD 1 billion is inherently conserva-
tive, since the analysis covers corporate functions of list-
ed entities and does not yet include potential savings in
operations of these listed entities nor the savings poten-
tial in non-listed companies and government entities.
The actual improvement potential for the region across
all firms and government entities can therefore be expect-
ed to be even greater.
Given the size of this opportunity, we would like to take
a closer look at what RPA is and when companies should
consider implementing it. We examine its potential
benefits and the areas where it can be used in practice.
We also present a detailed roadmap for implementa-
tion, consisting of four key steps.
1. The question is not if, but when
Robotization is quickly gaining ground in the Middle East
3
Source: Infront, March 2018; average of 368 companies in the Gulf Cooperation Council
Especially in the Middle
East, where a high
propor­tion of processes
are still performed with
only limited or no system
support at all, RPA has
great potential to in­crease
corporate efficiency.
4 Roland Berger Focus – Robotic process automation in the Middle East

5. What is RPA exactly and what does it do? In brief, it is a
software solution that simulates a virtual employee
and interacts with existing software in the same way a
human employee would, but much faster and 24/7. RPA
software applications focus on standardized, stable pro-
cesses and follow a rule-based decision logic to perform
a process.
The great benefit of RPA is that if information is re-
petitive, the technology can work independently and
without supervision, for example to enter data into a
system. If the information is unstructured but the pro-
cess is rule-based, it is worth assessing whether the in-
formation could be sourced in a more structured man-
ner so that RPA could still be used. In processes in which
the underlying information is unstructured and the pro-
cess is judgment-based, then human support or more
complex artificial intelligence-based solutions will like-
ly be required in order to automate the workflow – but
even here RPA can frequently be used as a complemen-
tary solution. A
RPA software is compatible with most IT systems
and software solutions. Its applicability is therefore ex-
tremely broad: Robots can process transactions, manip-
ulate data, trigger email responses and communicate
with other IT systems as well as internal and external
clients. The automated solutions accelerate processing
speeds by up to 15 times and can work on demand or
around the clock – 24/7. Based on Roland Berger's expe-
rience and discussions with RPA developers in the Mid-
dle East, one robot can, on average, perform the work of
two to five full-time employees depending on process
complexity, implementation quality and optimization
of usage at a cost of a fraction of the employees' salary.
RPA solutions can unleash significant efficiency po-
tential and should be considered both as a stand-alone
measure and as part of overall process optimization pro-
grams within companies. Processes should be reviewed
for end-to-end optimization opportunities with the goal
of digitally re-engineering and realizing the full optimi-
zation potential. However, other optimization measures
should always be considered in parallel, such as utiliz-
ing the full potential of an existing ERP system's
functionalities or implementing improvements in the
current IT landscape. Compared to other process opti-
mization solutions, RPA stands out with its ability to
quickly implement changes to existing IT systems and
processes. B
A broad range of tools exist for helping companies
optimize their cost structure. Increasingly, the chal-
lenge for companies is thus to determine which tools to
use and when. Compared to traditional tools for cost
reduction such as process optimization, outsourcing
and offshoring, RPA stands out in terms of its flexibility
and the fact that it can largely be used independently of
legacy IT systems and the existing process landscape.
Unlike traditional optimization methods, RPA therefore
enables companies to react quickly to internal and exter-
nal changes. Moreover, after an initial knowledge trans-
fer, firms can usually swiftly start to develop their own
RPA solutions in-house. In terms of financial impact,
RPA offers highly promising returns with payback peri-
ods of less than 12 months being very common.
The efficiency potential of RPA is, in our experience,
particularly high in the Middle East because many firms
in the region are not yet as advanced as their competi-
tors in the Western world when it comes to optimization,
automation and digitization of processes. This is due to
the fact that, over recent decades, companies in high-
wage countries have been forced to undergo a broad
range of process optimization waves, such as process
changes/reengineering as well as outsourcing and off-
shoring pushes, to stay competitive. Due to their histor-
ically high profitability levels, companies in the Middle
East have frequently not been as concerned with person-
nel cost optimization. But recently, average salaries in
the Middle East have increased significantly and coun-
2. RPA has a vast range of benefits
It cuts costs, is easy to implement and enhances customer satisfaction
Robotic process automation in the Middle East – Roland Berger Focus 5

6. UnstructuredStructured
tries in the region today take front seats in earning pros-
pects for qualified expats in international comparisons4
.
Besides offering savings opportunities, RPA technology
has a number of additional advantages:
Flexibilityand scalability: RPA solutions give companies
more flexibility to react to demand fluctuations. This
characteristic is particularly interesting for Middle
Eastern companies with international growth ambi-
tions in – at times – volatile markets
Ease speed of implementation: RPA solutions are auto-
mated processes that feed into the existing IT system,
so no extensive changes to legacy systems are required.
As mentioned above, the overall implementation time
from initial idea to deployment of robots in most cas-
es is not more than 12 to 18 weeks
Enhanced customer satisfaction: RPA can lead to im-
proved customer satisfaction due to increased respon-
siveness in customer interactions. Robots not only
perform tasks faster than human beings, they also
work around the clock
Improvedprocesscontrol:RPA keeps processes in-house
and system-based, which facilitates control. The tech-
A: Where does RPA have the greatest potential?
RPA is most effective with simple processes and structured data
Source: Roland Berger
Log into any application
Move files and folders
Open emails and attachments
Connect to system APIs
Scrape data from the web
Extract and process structured
and semistructured content from
documents, PDFs, emails and
forms
Copy and paste data
Read and write to databases
Make calculations
Communicate via chatbot
PROCESS
COMPLEXITY
Judgment-
based
Rule-
based
INFORMATION STRUCTURE
Limited RPA
potential
(potentially
supportive role)
High RPA
potential
Limited RPA
potential
(re-evaluation of
data source)
RPA could be a
complementary
measure
4
Source: HSBC Expat Explorer Survey 2016
6 Roland Berger Focus – Robotic process automation in the Middle East

7. LowHigh
nology therefore represents a compelling alternative
to offshoring and outsourcing, particularly for tasks
with low complexity and high volumes
Effective quality assurance and regulatory compliance:
RPA solutions function practically error-free and thus
ensure a regulatory-compliant process, which essen-
tially eliminates the need for quality checks by em-
ployees. Indeed, robots can conduct full data reviews
and draw up investigation reports themselves
As mentioned, RPA solutions are most suitable for stan-
dardized, stable processes that follow a rule-based deci-
sion logic. In line with the concept of end-to-end pro-
cess optimization, RPA can, however, also partially
support the automation of processes across depart-
ments, such as purchase-to-pay or order-to-cash pro-
cesses, which can lead to further significant savings. For
this reason, RPA solutions are already popular with Fi-
nance and Procurement functions and at banks and in-
surance companies, which offer largely non-physical
goods and services. But the technology's potential is
equally promising in other industries such as transpor-
tation and communication. C
B: RPA is easy to implement
Change requirements and difficulty of implementing optimization measures – RPA as an opportunity for the
GCC region to leapfrog ahead in operational excellence
Source: Roland Berger
CHANGE
REQUIREMENTS
IN IT SYSTEMS
AND PROCESSES
Low
High
DIFFICULTY OF IMPLEMENTATION
(Selected)
system changes/
introductions
Enhancement
of current
systems
Digital
process
reengineering
RPA
solutions
Robotic process automation in the Middle East – Roland Berger Focus 7

8. Source: Roland Berger 1) Depending on current automation level
C: All industries can benefit from RPA
Cost and time savings, freed-up working time (FTEs) and payback periods (actual examples)
COMPANY
RESULTS
AccountingDEPARTMENT
Accounts receivables
reconciliation
FUNCTION
70%
Reduction in
processing time
35%FTEs freed up
A COMPANY
Operations
Supplier invoice
handling
50%
40%
DCOMPANY
Procurement
Procurement
execution
65%
30%
B COMPANY
HR
Employee payroll
processing
45%
35%
6 monthsPayback period 10 months8 months 6 months
C
Recruiting process
Employee onboarding
Queries ticketing
Visa application process
Supplier invoice handling
PROCESS COST SAVINGS POTENTIAL1
Customer dunning
Invoice interfacing
Statutory reporting
Month-end closing
Accounting
Supplier management
Master data management
Contract management
Procurement
Cash management
Bank account reconciliation
Management reporting
Treasury Controlling
HR
Operations
DEPARTMENT
0% 100%
30-35%
10-15%
15-20%
40-45%
20-25%
25-30%
25-30%
30-35%
35-40%
15-20%
25-30%
25-30%
10-15%
15-20%
15-20%
8 Roland Berger Focus – Robotic process automation in the Middle East

9. Developing RPA solutions can be done quickly. But the
implementation requires a structured approach and
careful management attention to ensure success.
Based on extensive project experience, Roland Berger
has defined a roadmap to support companies as they
start out on their journey towards robotic process au-
tomation. Once established and when first business
cases are successfully implemented, companies can
use the same roadmap to develop and implement fur-
ther RPA solutions inhouse, usually with limited or no
external support. D
STEP 1: CONDUCT A FEASIBILITY STUDY
The first step is to conduct a feasibility study to evaluate
the applicability of RPA solutions in those areas of the
firm thought to have high potential. The feasibility
study should include a preliminary analysis based on
interviews, focusing on the relevant process landscape,
system architecture, interface structure and personnel
cost base. Firms can then calculate the potential of RPA
using specific criteria, such as working time (FTE) freed
up, data quality, variability and exceptions, number of
process steps involved and IT systems affected.
STEP 2: ANALYZE THE PROCESS AND
DEVELOP A BUSINESS CASE
Firms should then conduct interactive process walk-
throughs for processes with high RPA potential, in
which key stakeholders go through the steps involved in
detail. Existing process documentation can be helpful
here, but walking through the process in a one-day
workshop will help identify any deviations between the
official process and real life. Robots are a full potential
substitute for human employees, so changes are not
required to existing processes. However, the process
analysis will allow the company to review existing pro-
cesses and streamline them if required.
3. A roadmap for implementation
Integrating RPA requires a structured approach and thorough preparation
D: RPA implementation roadmap
Four steps to success
Source: Roland Berger
1.
Conduct a
feasibility
study
3.
Select the RPA
software and
integrator
4.
Develop and
implement the
solution
2.
Analyze the
process and develop
a business case
Robotic process automation in the Middle East – Roland Berger Focus 9

10. STEP 3: SELECT THE RPA SOFTWARE
AND INTEGRATOR
The market for software and for integrators can lack
transparency, making it difficult for companies to iden-
tify reliable partners. Here, it is necessary to consider
both the specific requirements of the company and its
organizational setup, as these two pieces of the puzzle
constitute the core elements of successful RPA imple-
mentation. It is worth noting that RPA software provid-
ers do not usually offer integration services themselves,
but rather work with independent RPA integrators.
Developing and integrating an RPA solution requires
specific IT capabilities. For this reason, we advise cli-
ents to work with an RPA integrator the first time they
implement a solution. After gaining experience from
one or more successful implementations, they can grad-
ually take over integration responsibilities internally.
STEP 4: DEVELOP AND IMPLEMENT
THE SOLUTION
The selected RPA integrator should take the lead in the
technical development and implementation of the solu-
tion. However, it is essential that knowledge is trans-
ferred to the company during the implementation: The
faster a firm manages to build up its own RPA imple-
mentation capabilities, the sooner it can reduce the
costs of RPA development and its dependency upon ex-
ternal vendors in subsequent implementation projects.
In fact, implementation is an ongoing process, with RPA
solutions being optimized and fine-tuned over time.
Once the company has built up its own RPA capability, it
should continuously be on the lookout for new areas
where it can implement RPA solutions.
CONCLUSION
RPA solutions are gaining momentum across in-
dustries in the Middle East and we strongly be-
lieve that RPA will become part of everyday busi-
ness life in the very near future. Recent
experiences in the Middle East bear this out,
since even traditional industries such as banking,
insurance and transportation have embraced
RPA solutions. In many cases, companies have
applied the technology across many of their func-
tions at the same time.
Given these initial examples and the power of the
technology, we expect an increasingly rapid adop-
tion. Complementary technologies such as artifi-
cial intelligence will expand the possibilities of
robotic process automation further, and will
bring down these last hurdles to application of
the technology. This is a USD 1 billion opportuni-
ty that companies in the region would be ill ad-
vised to ignore. Ultimately, given all the benefits
of the solution, combined with the low cost and
ease of implementation, we expect to eventually
see an almost ubiquitous application of RPA tech-
nology across the Middle East and the rest of the
world.
10 Roland Berger Focus – Robotic Process Automation in the Middle East

11. Roland Berger, founded in 1967, is the only leading global consultancy of German
heritage and European origin. With 2,400 employees working from 34 countries,
we have successful operations in all major international markets. Our 50 offices
are located in the key global business hubs. The consultancy is an independent
partnership owned exclusively by 220 Partners.
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Looking forward to the next 50 years, we are committed to supporting our clients
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Robotic Process Automation in the Middle East – Roland Berger Focus 11

12. AUTHORS AND CONTACTS
Dr. Johannes Distler
Principal, Roland Berger Middle East
+971 56 494 7057
johannes.distler@rolandberger.com
Dr. Fabian Engels
Senior Partner, Restructuring Corporate Finance CC
+49 30 39927-3598
fabian.engels@rolandberger.com
Wolfgang Hach
Senior Partner, Financial Services CC
+49 89 9230-8724
wolfgang.hach@rolandberger.com
Kushal Shah
Senior Partner, Head of Digital Middle East Asia
+971 4 433 7283
kushal.shah@rolandberger.com
Sassan Hatam
Partner, Roland Berger Middle East
+971 50 657 8158
sassan.hatam@rolandberger.com
CONTRIBUTORS
Christof Kiefer, Kathrin Stenner
More information to be found here:
www.rolandberger.com
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Roland Berger GmbH
Sederanger 1
80538 Munich
Germany
+49 89 9230-0
www.rolandberger.com
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