Will Robotic Process Automation Replace Outsourcing Jobs?

Key takeaways

Robotic Process Automation (RPA) significantly impacts near and offshore jobs by automating repetitive tasks.
RPA has the potential to automate nearly half of traditional back-office functions, reducing operational costs.
The RPA market is projected to grow rapidly, reaching nearly $5 billion globally in the near future.
Key functions of RPA include data analysis, information transport, effective communication, and behaviour forecasting.

If there is one area that Robotics Process Outsourcing affected widely is near and offshore jobs. Robotic process automation (RPA) is applied to a variety of business processes by automating rule-based monotonous tasks and bridging temporary gaps. Basically, the RPA engines are loaded with highly-specific process knowledge which enables rules-based automation. Today, robotics lifecycle is automating almost half the traditional back-office functions which are being augmented with automation and are offsetting the cost of locations, noted a Deloitte Financial Services paper. So far, the early stages of adoption have shown businesses great benefits. According to recent statistics, robotic automation market will reach $4.98 billion globally and is forecasted to grow at a rate of 60.5 percent.

Some of the key functions that robots follow are:

Gather, validate and analyse structured and unstructured data
Record and transport information and data
Communicate effectively with users, clients and customers
Learn, anticipate and forecast the behaviour outcomes effectively

So, how is RPA a threat to the BPO industry? A Sage Intaact blog indicates that RPA has the potential to make many outsourcing relationships obsolete. According to the top four accounting organisations, the costs savings of RPA over outsourcing are around 70 percent. Along with the cost-saving factor, RPA also gives organisations complete control over the automation process, can be scaled to suit demand, simplifies communication and delivers accuracy for rule-based tasks. Do BPO companies and teams fear the onslaught of RPA? The fears are largely exaggerated and Tom Davenport of MIT Center for Digital Business and Deloitte Analytics says that automating types of tasks with a machine may not be earth-shattering, but the early adopters of RPA do seem to have generally achieved some impressive returns on investment. Citing an example, he emphasised in a blog post as to how one telecom company that automated 160 different processes, achieved an ROI that ranged between 650 percent and 800 percent.

According to Davenport, the processes that were structured and codifiable enough to move to services outsourcers are the same ones that will be automated.
Many outsourcers have realised this and now offer either their own proprietary RPA solutions or “white-labelled” versions from other vendors.
Currently, business processes that show a high degree of knowledge and expertise, from radiology to legal document review, are already being partially automated.

Will Cognitive Automation Spell The Doom For Outsourcing?

Which brings us back to the question — will automation kill the era of outsourcing and what kind of impact it will have on the labour market? Davenport revealed that all automation systems require human involvement in the form of configuration, oversight and maintenance. Also, the role of outsourcers will change in the future where they will have to go beyond mere labour arbitrage. Outsourcing companies will have to provide a range of automation technologies and reskill process and technology experts. Here’s how Davenport puts it — the mere fact that human involvement is required at every stage of the process for cognitive automation indicates RPAs will not make the vast majority of human functions obsolete.

RPAs Won’t Affect Outsourcing

Even though BPOs will become less profitable in the future, the technological advancement of cognitive automation will converge, mature and will be augmented by humans. The question that most outsourcing companies are grappling with today is to what extent will this affect the business of offshoring. On the upside, RPAs will enable companies to achieve unparalleled levels of process accuracy and efficiency and at the same lower the cost as compared to the work that can be done by human employees. In addition to this, RPAs can effectively provide activity logs and evidence of how decisions were made, ensuring they meet auditing requirements. Besides, the trend will not just affect a few sectors but will be a global employment and economic trends. In terms of India, where outsourcing is one of the biggest sources of employment in India, this will affect the labour outcome. A research report from KPMG’s Cliff Justice highlighted the shift to RPA is a double-edged sword. It will not only digitise labour with advanced machine intelligence, big data, analytics, mobile technologies and cloud computing, but also hugely impact the knowledge worker labour market. However, a section of economists suggests that RPAs will impact the labour market positively by expanding the job market and created new roles.

Will Robotic Process Automation Bring Down The Curtain On Outsourcing?

Key takeaways

Some of the key functions that robots follow are:

Will Cognitive Automation Spell The Doom For Outsourcing?

RPAs Won’t Affect Outsourcing

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