RPA vs Outsourcing: Which path to take in 2019?
Evolution is never limited – the same is applicable to technology because that too has undergone a lot of evolution. One such change has been to reduce the human efforts and rely on the digital workforce. It has the ability to increase efficiency and speed up repetitive, high volume and rule-based tasks requiring very little human judgment. And this came as a huge blow to labor arbitrage when Robotic Process Automation (RPA) took over outsourcing. The outsourcing strategy worked for years, not to boost efficiency or as a long-term strategy, but only to cut-costs in middle and back-office operations.
RPA vs Outsourcing: Why RPA Model over Cost-Cutting Model?
Robotic Process Automation (RPA) is a technology that helps people configure a robot or computer software that use one or more applications to process a transaction, manipulate information and get feedback after communication with more digital systems. In fact, A.T. Kearney ranks RPA as one of the main new technology affecting the landscape in its 2016 Global Services Location report.
RPA opens new opportunities, transforms and redesigns processes and changes the way of delivering a service. This is way faster, efficient, accurate, and reliable compared to humans thus delivering zero-error execution, 100% compliance and audit tracking. A few examples of successful automation achieved by RPA implementation, provided by Blue Prism include:
• A global bank has automated several processes with the help of RPA and it includes Loan Application Opening and Right Of Set Off, Fraudulent Account Closure, and more. They proclaimed to save around 120 FTE and reduced bad debt provision by more than $200 million per annum.
• An insurance firm in the UK processed about 3,000 claims per day with a human labor of four people only. If they didn’t incorporate RPA they might have required 12 people in the team.
• The NHS Shared Business Services closed 180 accounting books in one month and every book took four hours to complete. With the help of a Service Desk robot in the US, they answered over 62,000 phone calls and provided a solution without human involvement.
Why is business process outsourcing no longer an option?
The cost-cutting strategy did work for a few years, but companies soon started understanding that it will not be a long-term solution. According to the A. T. Kearney 2016 Global Services Location Index, six of the top ten countries for BPO are in the Asia Pacific region. India holds the No. 1 spot, with China and Malaysia coming in second and third respectively. Issues like the rise of labor cost increases in most countries, backlashes from political scenarios and labor unrest, taxation issues, and increase in overhead expense could be some contributing factors so as to why several companies are opting for Robotic Process Automation (RPA). Additionally, there is an economic dependency on call center outsourcing, which can be reduced with the help of robotic automation. Companies are finding it difficult to retain foreign employees who are skilled and will also work at a low cost.
Benefits of Robotic Process Automation (RPA) in call center outsourcing
Reducing operating costs
Practically, the cost saving approach with the help of Robotic Process Automation (RPA) is going far and wide. It is helping business cut down on both infrastructure costs and operational costs. When business begins to scale up, it is tough to hire new employees – it is both time-consuming and expensive. If you look at the high turnover of a call center outsourcing market, you will also note that the entire process is quite tedious and it is tough to stick to low operational costs.
RPA cuts down the requirement of needing new employees and outsourcing. Businesses are looking forward to deploying robotic resources that are not just cheap but more efficient. RPA is proven to cut down operational costs by approximately 75% and the technology completely adapts to the existing systems, security policies and infrastructure. Surprisingly, Robotic Process Automation (RPA) doesn’t need a software-coded program or script, but it has to map the workflows of the call center outsourcing processes. RPA helps the businesses manage an operation and lessen dependency on the IT department.
Improving customer experience
Automation handles mundane and repetitive daily tasks that otherwise would be taken care of by the call center executives who are, more often than not, a part of the outsourced service organizations. More and more companies are adopting RPA to deliver a better customer experience. RPA will be more specific and accurate on handling customer’s requirements with zero error rates with at a faster speed. These include post-call, customer follow-up, customer satisfaction validation, offer new business opportunities to the satisfied clients, and more. Also, choosing RPA over outsourcing, comes with the ability to make faster changes to workflows on a need basis, rather than drawing up new, detailed processes plans each time for approvals– which might take to take a longer time to come into effect.
Having said that, even though it is a force that has swept many functions and certainly the one that the BPO sector should consider competition and take serious notice of, it is not yet at its peak and surely needs to break through some barriers:
1. Technology limitations
RPA cannot handle unstructured and non-digital data like customer letters, conversation style email correspondence, etc. Organizations might have to incur an additional investment to digitize the inputs using OCR, digital capture, process optimization or other intelligent automation technologies to complement the RPA solution.
2. Fear of headcount loss
For employers across functions, one of the greatest fear is to lose their workforce, with the introduction of technology advancements. For many organizations, the headcount doesn’t change. They have the same staff, given more meaningful and value-adding work.
3. Governance limitations
While the authorities are engaged in rolling out improvements to customary outsourced connections, this process may be a prolonged one an often unyielding. So when bots are in-charge of thousands of assignments, mistakes made through self-benefit arrangements could lead to some devastation. Given the minimum want for the involvement of IT teams in RPA, who do you name whilst all of it is going incorrect?
Why are the outsourcing loyalists opposing RPA?
Since RPA has been a rising competitor in the market and is likely to grow further, as technology marches forward, the traditional outsourcing vendors will either have to incorporate RPA or think of strategic ways to stay relevant to the outsourcing industry. Be it lack of awareness of the technology, or simply the magnitude of investment that companies would have to make to fully implement RPA, the outsourcing players are holding their ground firm as of now and waiting to see if at all RPA in outsourcing becomes mainstream. And once the power of RPA is realized, these loyalists would then transition towards leaner workforce– that requires minimal micromanagement with greater rapidity, accuracy, and frugality.
It remains to be answered if RPA would completely uproot traditional models of outsourcing, or will BPOs leverage RPA capabilities in their processes and the make use of advantages of software robotics. RPA is still waiting to be completely recognized– its usage, understood and advantages, fully utilized. Looking positively through to the future of robotic intelligence– managed by humans, RPA, if adopted by organizations that employ outsourcers, would define a new way to innovate and help the industry grow.
Let us know what you think about our take on one of the hottest topics of discussion for businesses today: RPA vs Outsourcing!