The march of automation continues to attract huge attention in both the business sphere and now the political sphere. The Business Process Outsourcing (BPO) market is truly feeling the pressure from both clients insisting on automation and, perhaps even more dramatically, President Trump’s public displays of disdain for the offshoring of American jobs. It’s well recognized – even in political circles – that offshoring jobs is the lesser of these economic threats. Obama himself explained, “The next wave of economic dislocation won’t come from overseas. It will come from the relentless pace of automation that makes many good, middle-class jobs obsolete.”
Nonetheless, the current political environment is far more favorable to automation than BPO. For instance, there have been reports that the U.S. is likely to significantly reduce the H1-B Visa program as part of its reforms, and similar limitations are muted by the U.K. This will significantly reduce the ability of the large technology consultancies to operate onshore. Not only that, but international trade relations are in disarray and under extreme scrutiny. This is illustrated through the trade discussions surrounding the U.K.’s Brexit and the protectionist rhetoric from the U.S. and increasingly from China. This means that every large or global organization needs to be focusing on its competitive position, agility and cost of operations because the future is very uncertain.
Enter automation, which is undoubtedly a significant opportunity for large enterprises. Much like the work typically outsourced to India, the jobs assigned to automation – and specifically robotic process automation (RPA) – are usually routine, repetitive and rules-based. These jobs can be operated remotely using various computer applications and involve limited customer and internal interaction. Rarely do these roles require any cognitive capabilities such as judgement or creativity.
Though some decisions, even quite complex ones, have historically been taken on by offshore workers, they have been taken against defined decision trees, prescribed by the client’s process owners. In essence, then, the jobs offshore workers have traditionally done are actually ‘robotic’ in nature. The work is repetitive and rules-based, making it ideal for the software robots we classify as RPA tools. As Professor Mary Lacity says, the use of RPA enables us to “take the robot out of the human.”
RPA tools can be configured to automate a significant amount of the work that is performed offshore today at a fraction of the cost of even the lowest offshore wages. In fact, it is well reported that BPO has rarely delivered true transformation nor significantly reduced headcount. As a result, many of the jobs that have been performed in low cost locations, though cheaper, are no more efficient and still prone to the vagaries of human error and behavior.
While automation, and specifically RPA, presents huge efficiency advantages and cost savings, it is vital that corporations take responsible, but decisive, steps to keep up with potentially disruptive economic and political forces, and understand the scale of the opportunity to apply automation to their back and middle-office operations. Best practice suggests establishing a Center of Excellence capability with senior sponsorship from business and IT that can review and provide governance around the automation potential across the organization.
Like all cost arbitrage, the shift to lower-cost robotic process automation is inevitable over time, and organizations should develop their strategies at the most senior levels due to the disruptive opportunity that automation presents. Large organizations that have already taken a structured and decisive approach are seeing returns on investment of 5x over three years and paybacks often delivered within one year. In almost every case, however, cost saving has not been the main driver of RPA deployment; often, compliance, quality and improvement in customer service reign. In fact, few jobs are lost at all with savings reinvested in new, onshore jobs that are created for humans and augmented by the new virtual workforce to focus on key objectives.
Whilst RPA may not present the solution to all processes end-to-end, it does present a unique opportunity for large western enterprises to repatriate the work that has been offshored. Much of the work will be performed by the software robots, but there will also be new kinds of human work which is much less robotic in nature. These new American and European jobs will be focused on improving customer service and developing products, further driving efficiency augmented by automation tools and helping to maintain and continuously improve the new virtual workforce. This new virtual workforce – which makes no mistakes, works 24 hours a day, can perform any configured tasks and scale up or down infinitely in seconds – is here to stay and ready to get to work.