Robotic process automation (RPA), “software robots” that integrate with legacy business process systems to handle mundane, rules-based tasks, can offer useful capacity and potentially transform BPO, a report by Datamark claims. According to the paper, “Because these software robots operate at a fraction of a cost of a human, and can work 24/7/365 without any breaks, industry analysts predict this technology will completely transform BPO.”
One company that opted to get ahead of the trend and adopt RPA is Cygate, a Swedish IT infrastructure solutions provider that utilized IPSoft’s autonomic technology solutions to automate some of its processes. Cygate was growing at a rate of 20 per cent per year, but its traditional model was not sustainable. “The increase in business risked straining quality standards. Automation was the only way Cygate could manage the growth in business volume without increasing employee headcount,” said Mats Magiste, Chief Commercial Innovation Officer at TeliaSonera, the parent company of Cygate. “Breaking the dependency between increasing headcount to serve every new customer delivered a massive contribution to business performance.”
“Why shouldn’t every company, no matter how small, have at least one robot helper? Pretty much every household in the developed world has a washing machine,” -Bathgate
Cygate is not alone, although widespread adoption is not yet visible. Frank Casale, Founder and CEO of the Institute for Robotic Process Automation, said: “At this time early adopters include mostly enterprise level-buyers who are under severe cost reduction pressure and who are in need of a new and powerful alternative to traditional outsourcing. In addition, many tier-one service providers have embraced RPA in an effort to deal with plummeting market pricing and deliver high quality at low costs.”
Jonathan Crane, Chief Commercial Officer of IPsoft, added: “With high demand and stagnant supply, automation is becoming an essential means to an end to free existing talent from low-level or repetitive IT tasks so they can focus on strategic business challenges and innovation.” He stressed that while many CIOs use traditional rules-based scripted automation, for example, to deploy computing capacity or respond to mundane, rules-based tasks, the technology has failed to keep pace with the increasing complexity of IT, driven in part by cloud and mobility.
Crane said that, despite its name, scripted automation requires a significant amount of human intervention to code, and recode, tasks again and again. Autonomic technologies, he said, are flexible enough to learn on the job and adapt to new scenarios instead of simply automating pre-defined specific individual tasks.
Jeff Augustin, Managing Director – Outsourcing Advisory, at Alsbridge explained that, from the BPO perspective, RPA is primarily still in the experimental phase.
“Though there are a handful of companies engaged with providers of BPO RPA (largely non-F&A), there isn’t enough evidence of the wide-scale use that would otherwise constitute a significant adoption trend,” he said.
Augustin added that thus far financial service organizations such as banks have been the earliest adopters. “Given the potential of robotics to take market share from low cost labor regions, companies opposed to offshore labor, but committed to cost reductions, are also forecasted to be possible trail-blazers,” he said.
Most innovation and adoption that Alsbridge is seeing are ITO solutions where enterprise-level companies across a full range of industry sectors are engaging through an IT outsourcing provider or directly with the autonomics software provider/servicer.
Augustin listed the following significant applications for RPA solutions:
Labor-driven areas, such as service desks and customer care centers, can expect a further unit price reduction via Autonomics that will vary depending on the business type.
IT infrastructure services including network management, server management, provisioning, process orchestration, and teleconferencing are other areas where autonomics is being applied today.
Cognitive, multi-lingual interpretive/voice response solutions can be leveraged by call centers, reservations centers, and sales centers. These virtual agents can handle more in-bound calls in multiple languages than a human force could possibly do.
Although total IT spend may be higher, the manual intensity of accounts receivable, accounts payable, and payroll demands a closer look at Autonomics solutions. Automating routine tasks can eliminate or free up resources for new, value-added projects.
The benefits are numerous. Crane said that automation drives down costs, improves response time, mitigates human error and provides data that allows for greater root cause analysis. According to IPSoft, Cygate’s revenues have increased by 56 percent while its EBITDA has grown by 118 percent, since implementation of RPA.
“[Cygate’s} customer satisfaction scores have jumped. And just as importantly, its employee satisfaction rate has improved, as indicated in the company’s annual internal survey,” he noted.
In its first year of deploying automation, Cygate experienced a 134 percent increase in tickets, but average response time decreased by 65 percent and mean time to resolution fell by 31 percent.
Automation also provides significant productivity gains resulting from a more strategic deployment of knowledge workers, according to Magiste. For example, at Cygate, “virtual engineers” tackle level 0, 1 and 2 activities, while human engineers have been elevated to work on Level 3 tasks. “Automation efficiently handles mundane, repetitive chores that consume so much of engineers’ time. As a result, skilled IT professionals can focus on creating innovations,” he said.
“RPA brings with it 25 to 40 percent labor cost reduction, killer analytics, and the beginning of a game-changing shift beyond labor arbitrage,” Casale added.
“Solutions will evolve from ‘I do’ to cognitive platforms with ‘I understand’ capabilities including voice response. Essentially, we will see virtual agents that interface on human terms,” – Augustin
The use of RPA solutions is not without challenges, however. Business education and breadth of application are potential obstacles, according to Augustin. “Many businesses do not even recognize that robotics is forging its way with certain service providers; and even some of those that have heard rumblings of robotics, have the mis-notion of a shiny futuristic human looking machine (technically an android)… sitting in a cube processing,” he said, adding that service providers will have to educate businesses of the concept of virtual robotics and the practical role it can have in savings and efficiency.
One of RPA’s most important benefits could also be one of its greatest challenges. Alastair Bathgate, CEO of RPA software developer Blue Prism, explained that many people have expressed concern that robots will replace jobs and destroy the economy.
“However, as history has proven time and time again, technology opens up new work opportunities , and jobs gained almost always outweigh jobs lost,” said Bathgate. “So far, I have not seen any companies cut employees as a result of adopting RPA. Instead, there is a reallocation of human talent. People now have the chance to focus on strategic, creative, customer-facing roles since they are free from the burden of administrative, back-office labor.”
Augustin stressed that risk mitigation in the adoption of RPAs is critical. “Leading autonomics suppliers understand the need to set aggressive SLAs and measure ROI,” he said. “Documenting and adjusting governance models are yet another way to mitigate risk during automation and the implementation of autonomics.”
So while it has potential, 2014 will not be the year that RPA truly makes a splash —“a lack of industry standards and perhaps just the ‘newness’ of it all means companies will take their time adopting these technologies,” according to analyst firm Ovum.
Significantly, Augustin said: “We believe that Autonomics is the single-most emerging game-changer since IT cloud solutions revolutionized the industry.
Solutions will evolve from ‘I do’ to cognitive platforms with ‘I understand’ capabilities including voice response. Essentially, we will see virtual agents that interface on human terms.”
Anubhav Saxena, President of Global Managed Services Research and Data Services with global outsourcing advisory firm Information Services Group (ISG), echoed this sentiment, saying that the economics of accelerating digital technology and its impact has and will continue to transform how business processes and services will be delivered.
“The increasing investments in automation…will transform the labor industry and jobs of a different kind will become available. The cycles will redefine economics of the unit of work and how it is rendered,” he said. “This will continue to create productivity and growth opportunities but will leave some people behind, even if it benefits society as a whole.”
RPA will also move into every industry over time and down into the SME space, if Bathgate’s vision reaches fruition. “Why shouldn’t every company, no matter how small, have at least one robot helper? Pretty much every household in the developed world has a washing machine,” he said.
Saxena added: “Like any other transformation, it will undergo successes and disillusionments, but emerge as a permanent mainstay, not too far into the near future,” he said.
Casale agreed that adoption would be increasing over the short to medium-term. “You don’t need a crystal ball to predict that the RPA trend will grow in 2015 and then explode in 2016 and beyond. RPA is real and it’s here to stay. It means there will be less people in the supply chain, more AI infused software and dramatically lower costs,” he said. “Companies need to buckle up—we are in for a real ride with RPA in the next 24 months by way of disruption, innovation and dramatic cost reduction.”