Robotic Process Automation (RPA) has been a hot topic in the BPO world for some time, but a recent Everest Group article sheds new light on just how much the phenomenon is impacting outsourcing worldwide. The verdict is in: RPA is not just hype; it’s happening, and it’s happening fast.
Among many other functions, RPA is leveling the outsourcing playing field between established service providers that have long invested in the labor arbitrage business, and newer service providers that favor automation and digital technology. According to Everest, “At an initial estimate, we see a phenomenon of 40-40 emerging which means 40% of existing BPS work is likely to get impacted by RPA with a 40% lower cost impact.”
RPA matters, and businesses are proving it by looking to newer service providers that have expertise in the field. Everest reports that more than half of FAO contracts in 2013 were awarded to non-incumbent providers. And according to Horses for Sources, 50% of outsourcing contracts are at risk.
Quite simply, using “cheaper fingers” to drive down costs is no longer a viable solution. Buyers are losing patience with paying top dollar for mediocre services, and demand better value from BPO firms.
Game Changer: The Promise of RPA
Outsourcing was once synonymous with “offshoring,” but those days are long past. The low-hanging fruit that have been driving cost reduction in the BPO industry – cheaper geographic locations and cheaper labor – have been gobbled up, making traditional labor arbitrage yesterday’s game.
The modern age of FAO has arrived, and RPA is a major player. It represents a kind of digital labor arbitrage and opens up the quest for innovation… (long the elephant in the BPO room). Today, progressive outsourcing is focused on delivering value through a more integrated approach, improving processes and leveraging automation technology, like RPA.
Among its many advantages, RPA offers:
- Dramatic cost-savings
- Lower attrition rates
- Reduced process cycle times
- Better quality
- Improved audit and compliance analytics
- The ability to move operations up the value chain
Benefits often include 40% to 70% labor cost-reductions and near-zero error rates. It’s no surprise, therefore, that so many organizations are looking to RPA to automate, digitize and standardize the bulk of their repetitive back-office work.
The Value Proposition
Sutherland is one of the first service providers to strategically focus on RPA. In Everest’s words: “(Sutherland) has made automation a key part of its proposition and is leveraging it to differentiate itself from other service providers that either rely heavily on offshore resources…
“We believe, as a relatively newer service provider in the non-voice BPS space, (Sutherland) is transitioning to a mostly automation-enabled provider in the back- and middle- office. We estimate that automation currently accounts for 10%-15% of its FAO & middle-office services but is rising fast.”
It’s true: RPA is one of our main focuses. It’s a key factor in providing organizations with the standardization and automation they need to ensure accuracy and efficiency. But RPA isn’t a one-off offering; it’s a key component of a larger delivery strategy.
For RPA to be effective, an integrated approach is essential. Silos must be knocked down, and a function like Order-to-Cash, which weaves between front- and back-office viewed as a single value chain. Processes must be reviewed. New practices put in place. Client companies must be willing to make change. RPA is a catalyst and an amplifier. (Not a cure-all.)
A Sharpened Focus for Your Business
Our strategic focus on RPA has led to ongoing partnerships with key RPA technology providers, and prompted us to develop our exceptional internal RPA support center. We are ideally positioned to help organizations transform their businesses, as evidenced by the major RPA deployments we deliver across multiple sectors.
We also believe in taking a big-picture approach, ensuring that all business processes line up. To learn what RPA and Sutherland can do for you, schedule an appointment today with one of our F&A experts.