RPA and the future of outsourcing

Robotic Process Automation (RPA), being touted as the next industrial revolution in the making, promises to transform processes like we have never seen before. It is of course about automation, but who could have ever imagined that machines could be taught to mimic humans and that is what RPA exactly achieves. In addition, it goes beyond to do what was humanly not possible, achieve a near error-free output. With Robotic Process Automation, organizations are re-thinking their business strategies that we hitherto leveraged around arbitraging human costs. RPA promises to free enterprises of the hassles of outsourcing to an extent. But will outsourcing be redundant? Can enterprises really be able to scale themselves to do every piece internally? Will outsourcing be a thing of the past?

Advantages of RPA

Automation increases throughput, therefore increasing productivity. RPA is one solution that will definitely be a game-changer by bringing in cost-savings, accuracy, and mass production, the basic that brought in the first industrial revolution. It will help enterprises achieve four different goals cost of savings, availability, accuracy, and compliance. RPA can do most of the routine jobs, any job that can be defined by a process and deliver output accurately. All that needs to be done is to write an algorithm that mimics the human process accurately. Once done, processes can be run automatically, round-the-clock thus helping get rid of one factor that limits human output – that of fatigue. Machines do not get tired after all!

Effect of outsourcing

Things that are routine are the first obvious targets of RPA. For example, Business Process Outsourcing or BPO in short. Companies often outsource these tertiary, non-core activities, often too far off countries, firstly to benefit from lower labor costs and secondly to concentrate on core tasks. With RPA and automation, much of that what is outsourced, could be replicated to be done by machines. The associated overheads of operations also go off along with that. Hence, many such process driven jobs are bound to be affected. At the same time, there would be newer requirements of knowledge workers, people who could design and run these robotic powered systems. There could perhaps be a need to outsource consulting and design work. Eventually, one category of outsourced jobs could be replaced by another that of course involves niche skills, skills that would be different from the ones the current workers are trained on. Re-skilling of workers could open up new opportunities for companies that serve the needs of enterprises who outsource.

Counter strategies

As the software gets cleverer and cleverer, and more and more processes can be automated, the economies of scale that give current service providers their price edge will be quickly eroded. They must seek innovative ways to gain competitive advantages by completing core operations quickly, accurately and cost-effectively. They should use RPA to their advantage and achieve drastically improved productivity levels. With RPA making quick inroads, companies have to be agile and fast to make the transition.

In the end, it is not about whether outsourcing would be relevant, it is more about using technologies like RPA to stay relevant, to help achieve enterprises boost their bottom lines.