Will robots change the future of outsourcing? Is Robotic Process Automation (RPA) the new Business Process Outsourcing (BPO)?

Hans JessenBy Hans Jessen, Global RPA Innovation Leader, EY.

There is a new robot in town that is creating a disruption in IT but it is not the physical, human-inspired robot that we are used to. Robotic process automation (RPA) is more about the software that consists of a set of coded commands that communicate with digital systems. These robots are programmed to follow rules, completing back-office and repetitive process-oriented tasks much more efficiently than humans, and they are beginning to change the way the outsourcing industry works.

Software robots could potentially transform the workforce by eliminating some jobs and creating new skill sets and roles for employees. Many rules-driven and process-oriented job functions, such as data entry positions, can be automated. Robots would not necessarily eliminate the need for human workers — they would enable employees to focus on more strategic initiatives and opportunities — but companies need to be sure that they have the right talent to successfully make this transition.

The advantages of RPA

Enterprises and their CIOs are under constant pressure to control cost and increase output in today’s fast-changing business landscape. RPA is one solution that can go a long way in helping enterprises meet these demands.

The use cases for RPA are increasing, and as more organizations begin automating their processes, some benefits include:

  • Cost savings: Software robots are estimated to cost one-third of the price of an offshore full-time employee (FTE) and as little as one-fifth of the price of an onshore FTE.
  • Availability: Unlike humans, software robots are available round the clock, which leads to higher productivity.
  • Accuracy: Accuracy levels are high with software robots and eliminate the need for human intervention and the possibility of human errors.
  • Compliance: RPA can be programmed to follow standard operating procedures without any lapse in productivity.

Roadblocks in RPA adoption

While the benefits of RPA are compelling, it does have some limitations that have slowed its widespread enterprise adoption:

  • RPA is best suited for highly rules-driven processes, and can lead to processing errors when there are frequent changes to those standard procedures.
  • RPA is not ideal for processing scanned images and unstructured data, such as free-flowing emails and attachments.
  • Given the nature of RPA, an error in one entry or transaction can be replicated across multiple entries. Correcting such mistakes can be challenging in the absence of proper monitoring.

RPA impact on the outsourcing industry

Automation is forcing business process outsourcing (BPO) and IT outsourcing leaders to evaluate RPA as an alternative business model. Companies report increased competition from those that have shifted some parts of their business using RPA capabilities. The bottom line is that RPA will change the dynamics of the outsourcing industry, and outsourcing providers will have to carefully consider the following questions:

  1. Do you have the automation capabilities to take on increasing competition?
  2. How do you make yourself relevant to your clients in the new era of RSA?
  3. How do you retrain your workforce to take advantage of the increased capacity without reducing staff?

Stay tuned

The European Parliament has proposed the drafting of rules that provide legal status for robots. Stay tuned to the CIO’s bag of tricks for a detailed look into the regulation and its implications.

Legal disclaimer: The views expressed are those of the author only and do not represent the views of any of the member firms of Ernst & Young Global Limited.

One thought on “Will robots change the future of outsourcing? Is Robotic Process Automation (RPA) the new Business Process Outsourcing (BPO)?

  1. Hey Hans, interesting read! Robotic process automation is already disrupting the business outsourcing industry by providing enhanced cost cutting and better control over processes. Moreover, RPA frees up the most critical resources of an organization – its people, who can then focus on critical tasks that influence quality, customer service and innovation.

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