Automation is the new outsourcing: RPA vs BPO

In the past 20 years, outsourcing has played a fundamental role in helping organizations tackle massive workloads at a fraction of the cost involved when hiring in-house. Although there’s visible change in this direction, outsourcing companies no longer benefit from the desired result. Customers are getting smarter, compelling companies to look beyond cheap labor. Across all industries, people want to benefit from a personalized experience and feel cared for while having requests & demands handled fast and efficiently.

In the past 20 years, outsourcing has played a fundamental role in helping organizations tackle massive workloads at a fraction of the cost involved when hiring in-house. Although there’s visible change in this direction, outsourcing companies no longer benefit from the desired result. Customers are getting smarter, compelling companies to look beyond cheap labor. Across all industries, people want to benefit from a personalized experience and feel cared for while having requests & demands handled fast and efficiently.

However, firing employees won’t increase a company’s profits if people are needed to develop products or perform certain services sold by a company. This is where process automation enters the scene. By investing upfront in software and complex machines, enterprises can decrease blue-collar workforce without putting productivity at risk. As opposed to people, robots don’t have an issue working 24/7.

In both IT & telecom companies need effective customer support that can be attained via RPA (robotic process automation) software. Blueprism, for example, provides differentiated customer experiences with their easy-to-control, business-led Digital Workforce Platform thus streamlining operational leaders. Armed with a range of RPA-based services, Blueprism enables leaders to reduce costs by automating service requests and delivering outstanding experiences 24/7.

“By 2021, a disruptive tidal wave will begin. Solutions powered by AI/cognitive technology will displace jobs, having the biggest impact in customer service, transportation, logistics, and customer services”, said VP of Forrester, Brian Hopkins. According to the Boston Consulting Group, 25% of all jobs will somehow be replaced by software by 2025. Fast Company predicts that automation and AI-based software programs will eliminate 6% of all US jobs by 2024.

Delivering value throughout the automation journey

The opportunity to leverage robotic process automation to streamline business processes has been in the center of attention of many companies as they join the race to compete in a digitized world that demands seamless operations and meaningful value from available resources. By implementing RPA, enterprises can automate processes that are rule-based with intelligent software that doesn’t need a human touch to work. Although the interest in RPA keeps increasing, there needs to be more clarity on what the technology entails, and how it can be implemented successfully.

“By 2020, end-user spending on robotic process automation software will reach $1 billion, growing at a compound annual growth rate (CAGR) of 41% from 2015 through 2020” (Gartner). The potential cost savings, execution speed, compliance and accuracy are the main benefits driving companies toward RPA adoption. Does that mean outsourcing will be left behind? Most likely; especially if traditional outsourcing models refuse to adapt. RPA provides tremendous opportunities, but organizations need a well-crafted strategy to harness them. In order to deliver value throughout the automation journey, six best practices apply.

1. RPA use case prioritization: identifying suitable processes for implementing automation following a definitive process to help quantify value and enable initiatives to deliver viable results. The smartest approach is to start small, attain small wins as fast as possible, and develop confidence among internal stakeholders.
2. Settling on realistic ROI goals: when adopting RPA, the biggest challenge is to settle on realistic ROIs. Enterprise processes keep becoming more complex as factors like geographic variations and regulatory requirements continue to increase in difficulty. Companies running large virtual workforces should think about centralizing control to be able to handle bots, monitor performance, and keep track of benefits.
3. Develop a suitable governance structure: to deliver successful RPA initiatives, defining roles and responsibilities is key. An RPA roadmap coupled with a deployment framework should help calibrate production.
4. Choose capable RPA tools: well-known RPA tools are capable of managing common automation scenarios. For outstanding results, organizations should consider evaluating tools and settling on those with pre-built automation and reusable components that are easy to link to backend systems, licensing and cost options. Just as important is working with service providers - such as UiPath -  that provide end-to-end process support.
5. Process reengineering to maximize RPA output: company leaders should reengineer business processes to generate desired outcomes and attain their digital transformation initiatives. Combined with RPA, strategies such as Six Sigma could hold the key to gaining maximum efficiency.
6. Set up efficient collaboration between IT and the company: a lack of collaboration between IT functions and the company might lead to RPA frictions. Often times, leaders that can’t determine how to include IT in discussions related to RPA planning assume that automation doesn’t need IT support. It should be a combined effort that abides by an operating model capable of defining roles and responsibilities for all players involved.

BPO (business process outsourcing) - an industry heavily disrupted by RPA

It there’s one business domain heavily disrupted by RPA, it’s definitely outsourcing. Although robotic process automation is a form of outsourcing, the outsourced work is performed by software. Truth be told, RPA does have an impact on existing BPO relations due to its increased usability and precise effectiveness. Does this mean the very nature of outsourcing is on the verge of disruption? Yes. Deloitte Consulting, in collaboration with KPMG and Everest Group, claim that RPA could outpace cost savings provided by outsourcing by as much as 70%. But the concern goes beyond cutting back on costs. By switching to automation and ditching outsourcing completely, organizations could reap benefits such as:

• Better control over the way companies drive and deliver automation, thus preserving internal focus over the company mission, vision, and goals
• Improved versatility since RPA can be applied to a wealth of business processes. Definable, ruled-based tasks are excellent candidates for RPA
• Guaranteed scalability to meet different variations of the business model
• Compliance, given that RPA can be programed to adhere to a prescribed set of operating procedures.

Applications of RPA in BPO industry tasks  

Rather than blame automation and RPA for the falldown of BPO, companies should think about integrating RPA applications in BPO-oriented tasks. Software should be seen as an opportunity for outsourcers to attain economies of scale. Better engagement in the workforce with less effort but more accurate results is something all companies hunt for. Mundane, repetitive tasks can be done quickly via automation, whereas more sensitive operations that require deep thinking or creative skills can be handled by employees.

In the simplest terms, automation frees people; enabling them to do what they do best: interact on a personal level and perform duties that demand brain power and analytical thinking. As intimidating as that might seem for an outsourcing company, it doesn’t necessarily mean BPO will reach rock bottom; on the contrary.

In banking, providers can integrate RPA within their existing BPO model to provide uninterrupted customer service. Also, they can automate tasks internally among employees, boosting immediacy in addressing only the most important customer-oriented queries. Consistency is yet another benefit since even the most well trained staff make mistakes. The experience can be homogenized with RPA given that the precision of a machine to handle repetitive tasks is truly unparalleled.

Conclusion

As simple as it might be to demonstrate automation works, identifying ways it can deliver transformational benefits within the company is fundamental to successful deployment. It doesn’t have to be a nerve-racking process provided there’s a suitable assessment of processes forecasting a realistic implementation of a plan. Contrary to popular belief, it’s not about buying and installing software and making sure it works.

Rather than focus on a “proof of concept”, a first step would be to aim at a “proof of value”. This way, companies can identify a sector where automation drives the most value. The next step is to configure a chosen software, make sure it solves critical internal problems, and find ways to gain a competitive advantage. Ironically, RPA is not about automating with machines but about working with employees and agree together on software that can solve their pain points. 

After identifying processes that must be automated, the third step is to ask for advice from the experts; and determine the complexity of the configuration. Using the insight and the advice of the experts, the fifth step is mapping the impact. Companies should design a customized model that best matches their employees’ competencies. Implementing RPA into the business model of a BPO company that has been outsourcing for decades won’t happen overnight. But with a clearly-outlined strategy, it’s worth the try.

With TJIP, organizations can leverage our smart platforms to speed operation processes; make them smarter, simpler, and a lot more efficient. Developed together with partners and clients, our “Smart Platforming Model” provides execution power that enables companies and organizations to innovate with new technologies and fill in the knowledge gap. The model centers at developing open Business Platforms that integrate easily with new technologies, thus accelerating digital transformation.