Six months ago, robotic process automation (RPA) startup UiPath announced a $568 million series D round of funding for a valuation of $7 billion. Yet last month, the company confirmed it has laid off around 11% of its workforce.
To some, UiPath’s journey from headline-worthy valuation to headline-grabbing layoffs could be a warning sign for the entire RPA market.
But I see the situation differently. Rather than sounding alarm bells for the future of RPA, I think the UiPath layoffs instead signal a market inflection point. RPA isn’t dead; the hype surrounding it is. And it’s now time to level-set about where the RPA industry actually stands and where it’s headed.
The challenging (and expensive) truth: Bots break.
Pureplay RPA vendors are overselling their solutions and not speaking the truth about the reality of what an RPA bot can do.
Rolling out and maintaining an army of bots is a formidable challenge, and too often, the industry doesn’t acknowledge the realities of this challenge. This includes many RPA vendors and global systems integrators.
First, getting RPA solutions up and running demands a significant amount of coding work — both upfront and on an ongoing basis — that requires budgeting for professional services. Second, RPA bots are often brittle because they’re hard-coded to key fields. Therefore, small user interface adjustments can cause them to fail.
These glossed-over challenges could help explain why companies deploy and maintain far fewer bots in practice than they initially purchase.
The perils of hype.
The recent UiPath layoffs say less about the future of RPA than they do about the problem of hype — both the hype cycles of overvalued startups and the hype surrounding RPA.
On the former point, UiPath is only the most recent instance of an unprofitable unicorn facing setbacks when economic realities
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