Is BPO and RPA the Right Mix?

In the last 15 years or so, organisations who looked to make their processes more efficient and cost effective would have turned to outsourcing as the answer. By taking the rules-based, transactional work and handing it to an expert Third Party to manage, the client could reap some decent savings whilst being able to focus on their core business.

But more recently, enterprises have had another option available to them – Robotic Process Automation (or RPA). Processes that can be automated through RPA need to be rules-based, repetitive and scalable – criteria that are almost exactly the same as those for outsourcing. Therefore, in theory, any process that can be outsourced to an offshore provider could be automated through RPA instead. That raises a number of interesting questions, the biggest one being ‘who should do the automation?’.

Firstly, let’s describe briefly what ‘doing the automation’ actually means. There are a few stages in the process, starting with the identification of the candidate processes. As mentioned above, these centre around their repetitive nature, with high volume processes tending to yield greater benefits. Once the processes have been identified they should be mapped to key-stroke level (this is a much more detailed level than organisations usually have their processes documented). These process maps are then used to configure the RPA software, telling the ‘robots’ exactly what they need to do. After extensive testing the robots are deployed to run the processes previously done by the organisation’s staff.

One of the big advantages of RPA over outsourcing, by the way, is that processes can be automated one at a time, rather than the ‘big bang’ approach of handing everything over to an outsource provider. But, essentially, both automation and outsourcing are all about understanding and mapping processes, and then getting other resources (robots or offshore FTEs) to replicate them.

So, if there is so much similarity between RPA and Outsourcing, regarding both the benefits and the approach taken, it would seem to make sense for the established outsourcing providers to take on and manage the automation for their clients. But this is not, in most situations, what actually happens.

From the outsourcing providers perspective, the challenge is that RPA will cannibalise their existing revenue streams. The business case for RPA is, in most scenarios, much stronger than for outsourcing, therefore any outsourcing provider who implements RPA as a replacement for FTEs will see a drop in revenue. And that is not always welcomed by the provider’s senior management, even if the longer-term benefits will be greater. This short-term mind-set, combined with an unhealthy obsession with FTE-based contracts, is a big problem for BPO (Business Process Outsourcing) providers and could be the dominant cause of their ultimate downfall.

But it is not only the BPO providers who are avoiding the ‘obvious’ choice to provide their automation capability: client organisations are turning to specialist RPA providers rather than approach their incumbent outsourcing providers. There are a number of reasons for this.

The first, and probably most important one is independence, and specifically independence from any RPA software. There are a number of different RPA vendors in the market, the majority of whom rely on their partner network of consultancies to provide their implementation capability. Each of these vendor’s software will have strengths and weaknesses, and there will be some packages that are more suited to your specific needs than others. (The biggest aspect will be whether the processes you want to automate require ‘assisted’ or ‘unassisted’ robots – some RPA software focuses on just one of these types, whereas others try to cover both). For outsourcing providers, they will generally have one strategic partnership with one RPA vendor, or will have developed their own bespoke RPA software. It may be that this perfectly matches your requirements, but it is more likely that you will want to be able to select the RPA software that will be most suited for your own needs. A specialist RPA vendor will be able to provide a much wider, and independent, choice.

Having a specialist RPA vendor also provides transparency – you will know which processes are being automated and what the benefits are. An outsourcing provider delivering an outcome-based service can be a good thing, but with something as fundamental as whether people or robots are doing the work needs some degree of transparency. Some outsourcing providers can also be a little reticent about giving back some of the benefits of the automation to their clients, especially if there is no risk-reward or gain-share deal in place. With a separate team focusing on automation, it will be very clear which processes are being automated and what benefits are being delivered from them.

That transparency, and the RPA specialist’s independence, will give clients much greater control of their automation agenda, and will ensure that the objectives of both parties are fully aligned. Even though the benefits of RPA are large, it doesn’t mean that every possible process should be automated – there are wider views to consider, such as those from your customers and employees. There are always risks involved in changing the way processes are run, and you will need to look carefully at those for each process. Much better to do this in close dialogue with your specialist RPA consultancy than leave it to your BPO provider to decide.

So, although it may seem at first that your BPO provider is the obvious choice to manage your automation agenda, it can often be a better long-term solution to find a specialist provider that will have your best interests at heart.

 

Tags: Business Case, RPA

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