Can RPA Break Free of the Hype Cycle?

Robotic Process Automation (RPA) is one of the hottest areas in the technology industry right now, so why would one of the biggest RPA specialists, UiPath, be laying people off rather than hiring as fast as they can? This was the surprise news when UiPath fired 400 employees (from a total of about 3,200) even when the company was valued at over $7 billion after a recent healthy funding round.

UiPath has defended the cuts by saying that they were all strategic. A comment in VentureBeat points out that there are over 90 open jobs at UiPath right now and these cuts really just reflect the end of a period of manic growth – it’s time to step back and ensure that everyone is focused on strategic growth.

Speaking to Information Age, Phil Fersht, founder and CEO at HFS Research, said: “UiPath is realising to its cost that intelligent automation is a marathon, not a sprint. It pushed the hype around RPA far too aggressively.”

There are many opinions swirling around, but as these commentators suggest, growth in RPA has been extremely fast. There are many different suppliers all competing in the same market and it’s simply not feasible to have over 20 software companies all offering the same – or a very similar service.

It’s easy to see why RPA has been hyped by the media and the software companies supplying RPA systems. There is a huge growth in interest in this technology and there are a large number of suppliers all competing for market share. The first to grab a large proportion of market share is most likely to succeed.

I remember visiting IBA Group at the end of last year and talking to their RPA team about how to choose between the various software suppliers. In an ideal world, a client would engage a partner like IBA to implement an RPA project and the initial phase would be to evaluate which software would offer the best solution for the specific needs of that company.

Most of the time this structured approach did not appear to be possible because the software companies would rush in, build a pilot to demonstrate their capabilities, and the client would say ‘I like that’ and ask their technology partner to implement it. Clearly this is not ideal, even with mature technologies, let alone nascent ones that are evolving this rapidly.

There are enough case studies out there now to prove that RPA is not just hype, but it has been in the interest of the leading software companies to ensure it is hyped – excitement is good for business. However, as UiPath has found out, if you are constantly sprinting then you will eventually need to take a rest before continuing with the race.

I am sure that UiPath is going to be OK. They just needed to focus on their product a bit more – manic growth is what happens in every unicorn. The RPA market in general will also be OK – it’s proven and there are global case studies that demonstrate the value. Where we will see some change in the months ahead is in more measured thinking and reporting about the value of RPA – it’s time to end the hype and really just focus on the benefits. There is already enough to say without the hype anyway.