Today’s Expert: Rachael Stormonth, Senior Vice President, NelsonHall. Rachael has global responsibility for ITO and BPO research management.
Today’s Topic: The evolving trend of robotic process automation, its impact on BPO in general and specifically on the Indian outsourcing providers.
How do you see this trend evolving over the next 3-5 years?
I expect to see significant expansion of the use of robotic automation software by enterprises, and also increased usage of it by BPO service providers, initially for automating highly repetitive rules-based tasks, usually where these are high volume activities, and also to cope with surges in demand. Sub-processes in Finance and Accounting and in some industry-specific tasks, for example within insurance claims processing, are likely to be early areas of adoption.
What impact will this have on business process outsourcing?
I do not see robotic automation as a replacement for labor arbitrage in BPO. But it provides an additional significant cost lever, and also offers a number of other benefits such as greater accuracy than manually done tasks and providing insights from detailed process analytics. For BPO service providers, this has the potential to break the link between headcount and revenue growth, a goal they have been chasing for years. The powerful combination of reducing the cost to serve, being able to offer a faster, more accurate and more scalable service, and being able to achieve non-linear growth, means robotic automation has the potential to be a game changer for BPO providers.
Will this hurt the Indian outsourcing players or is this a new trend for them to embrace?
To my earlier point, very much the latter: both IT and business process outsourcing vendors are looking to reduce the cost to serve: robotic automation offers them a cost lever to apply on top of labor arbitrage. Service providers offering both global delivery (for those processes where this is appropriate) and also extensive and relevant use of robotic automation (again for those processes where this is appropriate) will be at a clear advantage over the next few years.