The future of outsourcing is not what it used to be. Apologies to Yogi Berra, but it is true. CFOs now report mixed or diminishing results from outsourcing, once a guaranteed method to reduce costs. It is time to consider Robotic Process Automation (RPA). RPA is changing the outsourcing equation, inspiring some customers to insource while allowing forward-thinking BPOs to reenergize their value proposition.
Every finance and insurance enterprise has employed outsourcing, but the laws of economics were inevitable: business process outsourcing (BPO) labor costs escalated as you and your competitors increase BPO demand. Your BPOs sought and established operations in lower cost geographies. The process repeated itself until BPOs ran out of geographies.
Furthermore, outsourcing has hidden costs. For example, there is the BPOs’ search and ramp-up costs for new geographies (costs passed on to you), worker turnover when they find better paying positions (BPOs are feeling the war for talent) and retraining costs when regulations (and the associated processes) change – this is especially endemic in the finance and insurance industries.
Outsourcing may still work for you and there is a way your BPO can enhance it.
Robotic Process Automation Revolutionizes Cost Savings
Robotic Process Automation (RPA) allows you to achieve cost reduction even when you are insourcing/reshoring. RPA also allows BPOs to achieve service levels previously unimagined.
RPA is the application of technology (software agents or ‘robots’) that automates workflows, typically repetitive, rules-based work. Think of RPA as a new class of digital labor. RPA mimics the actions a person would take while working on a computer. These can include interactions with desktop applications, enterprise applications, email, green screens, websites, portals, etc.
RPA is an ideal replacement for the traditional outsourced business processes. Think of those steps that involve manual data entry, data validation or screen scraping such as new account setup, deposit or check processing, claims processing and account management. RPA can perform these routine tasks error-free, 24/7 and a lot faster than humans can. RPA scales up with no or minimal incremental cost. The Institute for Robotic Process Automation (IRPA) estimates that a robot costs 25% – 30% of an offshored full-time employee (FTE).
RPA will not disrupt your enterprise. It complements your software applications, has a short implementation time and much lower implementation costs compared to other enterprise application projects.
RPA is a Win-Win
Outsourcing was once disruptive and most of us have realized its benefits. Today, economics and advancing technology are challenging the appeal of BPOs and forcing them to enhance services offerings. RPA is a natural, if not a mandatory addition to a BPO’s repertoire. If your BPO does not use RPA, you need to bring them to the table and let them know what is at stake.
At the same time, RPA provides you with an alternative to outsourcing. Some of the benefits you can realize with RPA include:
- Employees are focused on higher value tasks rather than tedious steps. This helps productivity and morale.
- You have more bandwidth to consider innovation rather than cost reduction.
- Agile response to change. You can deploy and adjust a robot quickly and inexpensively.
- Faster and higher volume processing enhance the customer experience.
- Enhanced controls and compliance. Your processes are more transparent and auditable.
- Your data, money, and jobs do not leave your country or your supervision.
- There are no lag time issues or latencies due to BPO interactions.
Join the Robotic Revolution
RPA is the new disruptive. By now, we are all pros at witnessing disruptive technologies, understanding their power and long-term implications. We are also pros at understanding the danger of not preparing for and participating in such disruptions.
As Cliff Justice in a CIO article advises: “
This is the time to plan for RPA. Fortunately, RPA is a low-risk, high return, innovative investment for any enterprise or BPO.
For more insights on how robotic process automation provides a strategic alternative to outsourcing, get a free preview of Digitally transform the way you work‒How to deliver big results in six small steps with process transformation. Or, download the complete ePaper here today.
Also, see how financial institutions are leveraging RPA to improve their operations in this ePaper: Forecasting Your Future: How Financial Institutions are Improving Operations, 3 Ways to Transform Your Business Using Robotic Process Automation