In recent report of A.T. Kearney, Automation has been highlighted as one of the increasing key factors in outsourcing decisions. A recent survey by Softomotive indicates that 46 percent of medium-sized businesses in the USA have adopted RPA. In this article we will analyze if RPA will make any negative impact to the BPO industry or it will replace BPO completely.
RPA’s threat to BPO
RPA has the potential to make many outsourcing relationships obsolete. Experts at Deloitte Consulting, Everest Group and KPMG estimates that that RPA can save up to 70% over outsourcing. The recent application of RPA in business has causes strong negative impact to the BPO industry. In the Czech BPO industry, automation has replaced the workforce of an estimated 4,000 employees, equals to 4 percent of their total BPO labor force. Telecommunications company Vodafone, also announced that after deploying RPA software, it will lay off 1,700 customer service people in Romania, India, and Egypt, representing about 8 percent of that workforce.
But as we know cost is only one factor when a company decides to outsource, RPA can bring additional benefits such as:
- Flexibility and speed: Any tasks that are rules-based and definable, you can consider to apply RPA. You can quickly and increase or reduce the workload that you can process, simply by adding more RPA robots or reducing the number of working robots. This give management the flexibility and speed they need to adapt with business change.
- Less training cost: For the tasks are repeated and rule based, you will need to train the robot once, after that, the robot do the repeated tasks 24/7 without exception. You do not need to worry about people leaving and training new members.
- Higher work accuracy: once the rules are defined, the RPA robots can follow and achieve higher accuracy rate than human.
- Standard compliance: Your RPA software can be customized to follow a predefined standard, as well as record any audit trail of the tasks. With this you can easily make sure the compliance of your operation with any standard, either it is ISO or HIPPA.
- Higher customer satisfaction: with standard compliance as well as speed of response, the overall service quality and customer satisfaction will be higher.
RPA’s weaknesses compared to BPO
Besides advantages, RPA has its weakness comparing to human. The following are some weakness you shall consider when applying RPA into your organization.
- In the context of processing scanned images and unstructured data, such as free-style emails or non-patterned documents, the current technologies do not allow robot to handle well. Thus the company must first find way to digitize data using OCR or similar technology. After that the digitized data can be fed as the input to the bots.
- RPA is best suited to rules-based processes, so if a business has frequent changes to its processes, then this situation, RPA is not a good choice comparing to using human.
- Customer experience is very important today. Even robot technologies are use like chatbot, voicebot, human interaction is still preferred by the customers.
When do you use RPA?
When you select a process to apply RPA, please consider the following key criteria:
- The tasks are repeated consistently. For example taking orders from ecommerce platform and feed to order management system.
- The tasks are template based. For example data being entered into specific fields in a form for processing
- The tasks are rules-based. If the tasks have many exceptions that cannot be predicted and defined, then they are not good candidates for RPA application. In such situations you can apply RPA in a hybrid way, your employee will be in the middle, and oversight the robotic actions.
Will RPA replace BPO?
From our analysis above, RPA brings in new threats to BPO industry however there are work that robot still cannot handle and human is still required. Outsourcing doubt continues to be a cost-effective option for the voice-based jobs that require that human interaction and high customer experience.
Instead of seeing RPA as the threat, some BPO companies are turning RPA to new opportunity taking advantages of the technologies to enhance their service offerings and lower their operation costs. Thus not like before when technology is not a big factor, how technical capability and innovation are two of the key factors when selecting a BPO company.
In fact, thinking in a more abstract way, RPA is itself a type of outsourcing. Instead of outsourcing to an offshore company, you outsource the work to software robots. In today fast-changing business environment, three core competencies that each business has to build are agility, flexibility and cost effectiveness. By applying RPA into rule-based and repeated tasks, company can achieve this, from both customer’s and vendor’s perspectives.
How BPO companies shall leverage RPA
1) RPA can be your differentiation to other players
Applying RPA technology not only give you the cost benefit but also make out standout among the BPO providers in front of the nimble and forward thinking clients.
2) RPA increases the capacity of your workforce quickly
RPA offers an alternative to the traditional labor intensive BPO model that we are familiar with. Your robot workforce is ready to take on the repetitive tasks and run 24/7. And there is no limit with the capacity, all you need is more CPU, memory and software license.
3) Areas that BPO companies can apply RPA
BPO companies can apply RPA technology in following areas:
- Data entry
- Data validation
- File and data processing
- Automated formatting
- UI manipulation
- Multi-format message processing
- Web site scraping
- Text mining
- Data integration such as uploading, exporting, downloading and importing
- Workflow based type of work
- Conversation such as exchange rate processing
If you want to learn more about RPA please check out our other article here: https://www.imt-soft.com/Blogs/Digital-Transformation/Robotic-Process-Automation---RPA-what-is-it-/