Is Robotic Automation taking over Business Process Outsourcing

Is Robotic Automation taking over Business Process Outsourcing?

Dec 29, 2023

The Business Process Outsourcing was conceptualized with the intent of enhancing output through cost reduction. The obvious possibility was only through outsourcing the job where there is a surplus, economical and skilled population. The growth of internet technologies helped businesses to implement the concept of outsourcing.

The tasks identified for offshore outsourcing happens to be repetitive in nature and time consuming. The best examples of this outsourcing model are bookkeeping, data entry, claims processing, data processing, and customer service. So, the ideal destination for outsourcing are primarily countries like India, Philippines etc. The plentiful work force in this region exhibited strength in the deliverables and possessed subject knowledge.

According to a study conducted by Grand View Research, Inc the global business process outsourcing market size is projected to reach USD 435.89 billion by 2028, registering a CAGR of 8.5% during the forecast period.

The main reason stated by the study is to reduce operating cost on non-core activities and divert attention to core activities driving business growth. Therefore, outsourcing supports the non-core activities, relieving the firms to focus on key areas.

The emergence of Robotic Automation in business practice:

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"The last decade was about replacing labor with cheaper labor. The coming decade will be about replacing cheaper labor with autonomics."Chetan Dube, Founder, IPsoft Inc.

As quoted, innovation introduced us to Robotic Process Automation. This discipline, though a sapling at this stage, has the ability to de-root the USD 435.89 billion BPO sector. In simpler terms, Robotic Automation is software running on either virtual or physical machines. It functions the best when the business processes satisfy a few conditions such as

  • Rule based
  • Repetitive in nature
  • Defined input and output
  • Large quantity of the task

Robotic Automation when deployed in firms, comes at par with humans, often exceeding human speed and accuracy. It shares the burden of humans; through exhibiting efficiency to the tasks provided, quickness in delivering the tasks, cost savings with its disciplined functioning round the clock. Apart from this, it convinces the management, its valuable position through handling

  1. Quality assurance is the place where RPA service has an upper edge. Even with trained staff, the chances for flawless results cannot be assured. With automation, the services provided remain consistent and standardized.
  2. Pre-defined guidelines give bots a flexibility to operate within the set parameters. If the given data is inconsistent with the standard prov1ided, it rejects the task for anomalies.
  3. One-time set-up and training cost is relatively lower, when compared to the entire process of hiring and training new staff or replacing staff. For repeated and rules-based tasks just an initial training is sufficient for carrying out the tasks all time, unless it requires changes.
  4. Scaling with ease to suit the needs of the business firm through automation deserves all praises. Depending upon the situation, either the firm can include a few bots or remove bots without having to make any alterations of the current set-up.
  5. Customer satisfaction helps the business to flourish due to repeat customers and new ones. A ‘word of mouth’ is sufficient to promote the firms’ service. This high level of customer satisfaction is possible through automation.

With automation providing all the right ingredients for a cost effective and efficient operation, it is likely that BPOs will eventually be replaced. But there are walls that robotic automation needs to scale before that.

The obstacles RPA need to overcome to replace BPOs

Automation has been around for some years taking toddler steps, but the pandemic gave its presence a wider audience. The difficulties faced by firms to mobilize their staff created a necessity to seek alternatives. This need executed a boom for adapting RPA as a digital worker at workplaces.

Theoretically, RPA is a promising replacement for BPO, yet we have not reached the stage where automation can handle all tasks without human intervention. The reasons are

  1. RPA is a best fit for routine, repetitive, and time-consuming tasks. The requirements for these tasks are accuracy and rapid pace to record in the accounting software. This process of automation is likely to cover only one quarter of the work done by BPOs.
  2. RPA is yet to recognize scanned images and unstructured data completely error free. Firms need to spend their invaluable time and cost in converting them to digital format for automation.
  3. There is resistance amongst workers due to fear of losing jobs. This is limiting employees’ participation in recommending processes viable for automation. The attitude creates a budget strain to the management. At places, the RPA fails to take off at the beginning phase itself.
  4. Interaction and human experience cannot be replaced through automation. Some offshoring tasks remain secured at the hands of BPO.

Modern business practices dwell on solutions based on flexibility, fluidity, and cost savings. BPO companies instead of considering RPA as a threat can introduce RPA in their work campus. The routine and rule-based jobs can be delegated to automation and retain the other jobs to humans. This will help BPO companies in the long run for reducing their operating costs and survival.

Also read: Myths and misconceptions surrounding Robotic Process Automation  

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