28 September 2017

Is RPA replacing BPO?

In February 2017 I blogged about the likely increase in RPA adoption that will result from a US Visa clamp-down and the UK’s impending Brexit.

By touching upon the offshoring policies of the US and UK, I received more feedback than from any previous topic, so this blog further explores the continuing shift from offshore Business Process Outsourcing (BPO) to Robotic Process Automation (RPA).

BACKGROUND

Back in the 90s, the US and UK began offshoring to save costs, sourcing affordable labour to execute business processes, with an offshore workforce typically following carefully prepared ‘run sheets’.

Now, Robotic Process Automation is redefining the business process outsourcing (BPO) landscape; corporations in the US and UK are making further savings by transferring processes from offshore outsourcers to RPA software robots (running on computers anywhere in the world).

Across all sectors, organizations are looking for ways to get the most value from their workforce, increase productivity growth and rise to market challenges. Incoming audit and compliance regulations, especially in the banking and pharmaceutical sectors, as well as in-house initiatives, drive the demand for a proven, error-free and robust digital workforce.

In the pursuit of greater productivity and optimisation, most large organizations now have a multi-tiered strategy, typically in these areas:

  • Optimization (digitizing processes and getting the most from the human workforce)
  • Shared areas of expertise (Centres of Excellence)
  • Globalization (hiring staff in lower-cost regions)
  • Digitization (automating document management, implementing self-service systems)
  • Regulatory systems (like Know Your Customer ‘KYC’, anti-money laundering ‘AML’)

The US is considered the biggest consumer of offshore outsourcing, which means it’s a key battlefield in the BPO vs RPA battle.

CURRENT SITUATION

A clear pattern of enterprise RPA adoption has emerged.

Phase 1 – Focus on the Low Hanging Fruit

In the early days of RPA implementation, adopters typically concentrate on ‘low hanging fruit’ - ‘bots’ replacing humans to undertake repeatable tasks with pre-determined decision paths. Why? Because even the most complex processes essentially boil-down to following set tasks and following decision trees (and, however complex a decision tree might be, bots love decision trees!)

Many of the tasks that were sent offshore in the 90s were those which were specified and monitored easily, because when work was hard to specify, it was also difficult to write contracts for its completion, so it didn’t get outsourced. Take administrative banking transactions - banks could specify the workflow and processing logic clearly, and it could be orchestrated via technology.

The location of the work no longer mattered, so it went to countries with low-cost labour and good English skills—top locations included India, Canada, Malaysia, Bulgaria, South Africa and the Philippines.

Phase 2 – Use Cognitive/AI for the High Hanging Fruit

When pure RPA has addressed the repeatable tasks with pre-determined decision paths, other challenges remain – no less urgent, but needing other associated AI technologies for resolution.

For example, Automation Anywhere’s Cognitive IQ Bot - which adds elements of human judgement and perception to Automation Anywhere’s market leading pure RPA solution. The new solution leverages advanced AI techniques such as computer vision and unsupervised and supervised machine learning. The technological advance significantly increases straight through processing (STP) for labour intensive processes such as invoice administration or loan application processing.

BPO Fights back, If You Can’t Beat ‘em… Join ‘em

The large outsourcing firms have accepted the inevitability of a rise in RPA. They have quickly adopted a me-too strategy and joined the automation fray themselves. Cognizant Technology Solutions acquired TriZetto. Infosys developed Assist Edge, Wipro developed Holmes and Tata Consultancy Services has its AI product Ignio.

The message seems to be that all parties now acknowledge that BPO is being superseded by RPA.

BEST PRACTICE FOR OPTIMAL RPA RETURN ON INVESTMENT

So, we know why and how RPA is being deployed, but what are the key take-aways for those still considering it?

In our experience, organizations implementing RPA-based solutions see rapid return on their investment if they get these basics in place:

  • Seek out affordable, pragmatic, experienced advisors (say, Extra Technology).
  • Tackle the easy stuff first - the low hanging fruit. Automate process-driven tasks first.
  • Build an all-inclusive Centre of Excellence. Enforce sensible low-risk methodologies without stifling innovation or restricting the RPA product’s capabilities.
  • Importantly, ensure that solutions are extendable – not requiring all processes and systems to be converted at the same time.
  • Consider how to ‘pass the baton’ between automation products. Most large organizations have multiple automation tools and will require interfaces between them.

If you’d like to discuss further any of the points raised in this blog, please get in touch.

 
Mark Mannion

Mark Mannion is Managing Director of Extra Technology, specialists in enterprise automation solutions in general and RPA solutions in particular. The Extra Technology RPA team are accredited Subject Matter Experts (SMEs) in Automation Anywhere RPA technology.

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