A look at the rise of ‘botsourcing’

Never underestimate the power of a rebrand.

In 2003, the Las Vegas resort known as Le Rêve decided to change its name. Le Rêve was hard to pronounce, no one knew what it meant, and it did not have the brand qualities that real estate developer Steve Wynn demanded.

So he changed the name to the Wynn Las Vegas Resort and the results were dramatic. He famously said that “branding this property was the smartest thing we’ve done”, noting that not even his legendary work with the Bellagio or the Mirage had the same impact.

Giving something old a new name can have a powerful effect.

Screen scraping lives again

In the days of the early internet, long before purpose-built integration solutions, screen scraping and scripting were commonplace. The technology would parse HTML-based websites, pull the information into a MySQL database and then fill forms in other websites. It was innovative for those days but it was also frustrating to just keep viewing the recorded scripts. At the time, it was all we had.

Today, screen scraping also has a new name, but rather than being called “The Wynn” it is dubbed robotic process automation (RPA). It is presented as an effortless way to automate simple tasks and it now has a nicer graphical user interface (GUI) and is cloaked in buzzwords like “bots”, “automation”, and “artificial intelligence (AI).” It has become popular for automating user interface (UI) and screen-based operations, especially for companies with large legacy footprints, where accessibility and interoperability are difficult to modernize.

Surprisingly, the real story of RPA is not the rebirth of 1990s screen scraping. Rather, it is a new coat of paint on a trend that has been around since the 1980s: cost arbitrage.

The new brand of cost arbitrage

Cost arbitrage, a fancy word for cost savings or efficiency, has had many names: offshoring, nearshoring, onshoring or outsourcing. It is how companies pay less to get the same results or achieve more efficiency, like the few examples below:

• IT support desk functions can be accomplished with lower-cost labor overseas so they might be outsourced to India.
• In some Eastern European countries, app development is cheaper so it might be offshored to Ukraine.
• A call center might be too expensive in California so it could be onshored to Texas, nearshored to Latin America or operated from the Philippines.

No matter what name it goes by, the goal of cost arbitrage is to do the same work, faster, cheaper and more efficiently. The most likely candidates are tasks that are easily trained on and repetitive.

Today, RPA has come to represent the next wave of cost arbitrage: we might call it “botsourcing” or “botshoring”. Businesses are taking processes that used to be outsourced and building “bots” that mimic those processes with exact precision. This appears to be the ultimate form of cost arbitrage: no wages in the US, no wages overseas and only the cost of the RPA software.

RPA does perform well in some areas

RPA will continue to grow, and not just for cost arbitrage. Companies still using legacy applications have few options for accessing their data or automating processes, so RPA is a great choice that can quickly yield 15 to 20 percent efficiency gains and quick wins where the business is independent of IT.

As part of the rebranding of screen scraping and cost arbitrage, RPA has embraced a magic word: automation. For company leaders under pressure to digitally transform their businesses, automation that plays well with their legacy stack sounds like a gift from above.

The pandemic has accelerated the march to the cloud, however, and companies that pursue only RPA for their automation needs will realize the limitations of a technology designed mainly for repetitive desktop tasks. Gartner notes that “task-based RPA alone is not a Gartner recommended approach for sustainable business value”.

The future of RPA

RPA should be considered the “first mile” of the automation journey. The next 100 miles will follow the continued push toward the cloud, where more robust automation led by application programming interface (API) automation can offer greater value, in efficiency, but also in support of innovation and growth.

In the cloud, automation must be able to support cloud-scale and reliable integration between disparate applications and data sources, something RPA was not designed to do. These markets are beginning to converge as companies like UiPath, ServiceNow, Blue Prism, and Tibco gear up through mergers and acquisitions to pursue that 100-mile journey.

If your goal is cost savings or efficiency by automating repetitive tasks, RPA is a good fit. But strategically consider the other promises of automation such as end-to-end process automation, adaptability and speed, connectedness, scalability and, transformed experiences. Achieving those involves graduating to other forms of automation beyond RPA.

The future of automation is not just cheaper processes, but rather an opportunity for entirely new processes. It is not about cheaper productivity and growth, but new forms of productivity and growth. There will always be companies that are looking to cut costs and save money. For companies looking to transform their businesses through innovation, however, the answers are not in cost arbitrage, but in following the cloud trend and transforming their organization with automation.