Is Business Process Outsourcing Losing Ground to Robots?

Daniel Senter

toy robot

You've probably seen or heard about the growing hype around robotic process automation (RPA) over the last few months. Many are flagging this as the start of the next industrial revolution; a surge of productivity that will enable higher levels of process efficiency.

Does this sound familiar? You might remember a little something called business process outsourcing (BPO). This is where a company outsources a process or collection of processes to a third party in an effort to drive efficiencies and cost savings. Over the last 10-15 years, BPO has helped businesses to leverage economies of scale, reduce their cost to serve and bring with it flexibility, particularly around responding to increases or decreases in demand.

Over the past 18 months we have seen a significant increase of companies moving away from the traditional BPO offering. Why is that and how does robotic process automation compare to business process outsourcing (BPO) solutions?

The drive for this shift stems from improvements in technology and the advancement of RPA tools. So let's first explore RPA to understand what it is and how's it's being used.

The easiest way to understand RPA is to think of it as a virtual workforce (software robots) that can run your processes completely or support you in doing it (unassisted or assisted automation). These robots either run on machines on their own or sit on your desktop and work alongside you. Scary!?

Unassisted automation

Unassisted automation is similar to the way that BPO providers run processes on your behalf. The basic RPA tools work on the basis that if your processes can be described logically then the software robots can be 'taught' to follow them. One of the main features of the RPA tools is the way in which they can be easily deployed with little integration or disruption to core systems.

Most RPA solutions interface with the systems in the same that a person would, by using the GUI (graphical user interface). This means that from an IT point of view the product is reasonably low complexity and - coupled with the wizard driven process configuration – can be put in the hands of the business rather than IT.

Once a software robot has been taught a process it can then run at whatever speeds your systems allow, running 24/7 or as your processes or systems will permit. This is where you start to see the significant savings in scaling up or down processes using software robots that can be deployed very quickly, all following the process exactly making no mistakes, taking no days off, and you start to get the idea...

The Institute for Robotic Process Automation (IRPA) quotes the savings to be the order of 1/3 of a typical off shore cost with even further savings when considering onshore.

Assisted automation

The best way to think of assisted automation is that of using a power tool versus doing something by hand. Software robots can be used as a tool to help make the process / activities more productive and less labor intensive, which reduces time and effort. These applications become of interest when looking at users having to manage work across multiple systems, copying and pasting information, moving between screens, looking up information, etc. A software robot could therefore be used to work in parallel, to quickly interrogate or present the information as required. This now offers process designers a new way to help improve processes and in some cases work around system limitations or fragmentation.

BPO's themselves are now starting to adopt RPA, recognizing their traditional operating models need to change and embrace this shift. So the question is how disruptive do you see this for your organisation?

What do you think? Are you using BPO and thinking of moving process back with RPA? Are you in discussions with your BPO provider to see how you can collect key use RPA?