Impact of Robotics on BPO Industry


Robotic software agents as a concept is quite new and it is more popularly known as Robotic Process Automation (RPA). It simply carries out various business processes usually carried out by humans. This runs true for certain processes that are repetitive, monotonous, rules-based and repetitive.

RPA today has emerged as a competitor to any business involved with or related to business processes (Business Process Outsourcing, or BPO). Some of the most obvious reasons as to why it is gaining popularity is that a software robot would cost approximately one ninth of a person working in the US or UK full time (Full Time Equivalent -FTE) or one third of an FTE working for example in India.

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Presently, the global BPO sector is in for a major impact by robotics. The BPO sector on a global basis  is worth over $300bn. In India there are more than 3 million people employed in this sector, in Europe and US, there are millions more who work in this sector. Robotics now is imposing a challenge for all these jobs.

Robotics is at a relatively immature state with the capability to replicate basic transactional tasks that would have an impacting of 20%-40% processes. But this is bound to increase with the acceleration of technological development.

Some major effects of RPA:

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  1. A global bank automated certain processes and saved over 120 FTE and reduced their bad debt by £175m p.a.
  2. After implementation of RPA,NHS Shared Business Services (SBS) closes 180 sets of accounting books in 4 hours, every month.
  3. A Service Desk robot could answer 62,000 calls a month from the firm’s information-technology staff in a large US firm. It helped solve two out of three of problems without human intervention.

For the BPO industry to survive and thrive, here a few ways the industry could function:

  1. Existing BPOs can adopt RPA as their core capability, though a transition is bound to occur.
  2. There is already a new section of service providers who are focusing on RPA and they are automating them irrespective of whether they are outsourced or not. The remaining complex tasks are left to be picked up. These new providers would be able to provide FTE capability. Their oitch would be automation first and if that is not possible then FTE support for some time.
  3. Many client organisations might want to take a do-it-yourself approach to manage and automate processes – somewhat like BYOR (Bring Your Own Robot). With software getting more effective, it is much easier to automate processes and this would result in a quick erosion of price edge. This is definitely not a very encouraging fact for large BPO service providers.

It is difficult to predict when such a condition would occur but it is not very far off- virtual presence of robots, ‘RPA capability’, ‘onshore plus automation’ are becoming popular and economically favorable. These are early days of robotics but is definitely set to have a massive impact on BPOs especially with the adoption of BYORs.

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