“(RPA) technology has the potential to dramatically shake up the outsourcing industry,” – HfS
BPOs: Time is Now to Build Your Virtual Back Office
For Business Process Outsourcers Robotic Process Automation (RPA) is rapidly becoming the basis of the next generation of back-office transformation. Outsourcing solutions built around Robotic Process Automation are now representing a major innovation lever for BPO providers and organizations that commit to it today will have developed a differentiated position as a result of the heritage, the strategic commitment and the speed of adoption.BPOs that are already working today to make Robotic Process Automation part of their standard client services portfolio are finding these results:
- Cost reduction: Robotic FTEs (rFTEs) are often 1/2 the cost of off-shore FTEs
- Efficiency: rFTEs operate 7×24 without breaks or vacations; one robot typically replaces at least two traditional FTEs, sometimes as many as three to five
- Accuracy: Humans make data entry mistakes, transpose numbers, skip steps in processes, etc. rFTEs perform the same task the same way every time – error free
- Compliance, Security and Business Intelligence: Every transaction appends to a detailed audit log enabling advanced business analytics and compliance with industry and governmental regulations
- Client satisfaction and Retention: BPO providers are expected, and contractually committed, to deliver innovation. RPA delivers innovation rapidly, cost effectively and with little risk.
In addition their Clients can derive substantial indirect benefits from:
- Releasing staff for higher value work
- Lower unmanaged attrition
- Vastly improved management information
- Business functions realizing that they can be more creative as the technology exists to provide more agility
“The BPO market is changing and next-generation BPO will need to go beyond simple labour arbitrage,” says Richard Jones, chairman of procurement outsourcing provider Proxima Group. “Robots use and drive applications in the same way humans do, so automation not only becomes possible, but also offers flexibility, scalability and affordability.”
Examples of Robotic Process Automation in BPO and Enterprise Use Today
- For a BPO provider process automation can be used to bring innovation to existing clients and to reduce costs on new business proposals and renewals.
- For end-user clients robotic process automation can bring massive productivity in transaction processing or shared-service centers and can eliminate the need to look off-shore for low-cost, rules-based process work.
- Even for the pure play off-shore outsourcers robotic process automation represents an opportunity to regain a labor cost advantage while reducing the level of workforce attrition common in highly transactional environments.
Cheap Robots: A Threat to Outsourcers, and an Opportunity
From ROBOTIC PROCESS AUTOMATION EMERGES AS A THREAT TO TRADITIONAL LOW-COST OUTSOURCING, HfS
For buyers, robotic automation has obvious appeal. It lets them quickly and cheaply automate business processes that don’t reach IT’s strategic development threshold – without having to send jobs offshore. Empowering business units to knock down their own tactical requirements reduces pressure on IT, letting it focus its expensive development resources on major software projects with high strategic value. Reducing the use of offshore FTEs frees up budget for more onshore hiring.
HfS Research believes that these early adopters represent a fair and realistic sample of what can be achieved with robotic automation. From there, it does not take a great leap of imagination to envision this technology having profound ramifications for the outsourcing industry. In short, giving non-engineers the ability to quickly automate a rules-driven business process with a robot that costs less than half of an offshore FTE is a significant threat to every outsourcing firm whose value proposition rests on low human labor costs.
BPO Service Providers: Keep Your Friends Close, But Your Robots Closer
- For low-cost outsourcers, robotic automation represents a significant threat, giving buyers a very cheap alternative to offshore FTEs with none of the political disadvantages.
- Develop your own robotic automation product in a hurry and start planning for a strategic change that relies less on your ability to marshal vast number of human FTEs and more on your ability to source selectively between humans and robots.
- Partner with an early market entrant like Blue Prism to jump into the robotic automation fray now, avoiding the likely two- to three-year development cycle it will take you to catch up with your own product and all the associated opportunity costs.
- Start acting on HfS’s longstanding advice to refocus your business on helping buyers achieve real business process innovation, not just lower labor costs. Look at robotic automation the way buyers do: as a tool for optimizing the use of expensive human FTEs.