October 25, 2016      

From factories and warehouses to the emergency room and finance office, the demand for reliability and productivity has led to increasing adoption and application of automation. Many repetitive tasks now relegated to business process outsourcing are getting competition from robotic process automation. How is artificial intelligence developing to compete with outsourcing?

Robotic software agents can carry out rule-based tasks related to information technology, customer service, and human resources. One example is data entry.

Robotic process automation (RPA) is a combination of AI and automation that promises unprecedented levels of efficiency and quality above conventional performance.

In a recent report, Allied Market Research predicted that the robotics technology market will experience a compound annual growth rate of 10.11 percent from 2014 to 2020.

Business process outsourcing (BPO) companies cannot wait around to see how RPA is changing their operations. The time is near when contracts will be won on the basis of which automation technologies are offered and used.

Robotic process automation can be applied to numerous business tasks.

Robotic process automation can relieve human staffers of repetitive work. (Source: UiPath)

Outsourcing companies need to determine RPA opportunities, best practices, and success strategies. Although there is a lot of hype about business process automation, companies need to take all aspects into consideration. Any technology implementation should be based on realistic expectations and an understanding of when and where process changes are needed.

In addition to internal business practices, potential adopters should consider technical integration and government regulation.

The next step after evaluating processes and a successful implementation of robotic process automation is to establish a center of excellence. This vital step helps with evaluating the functions that are relevant for automation and assists internal divisions with automating their most repetitive tasks.

Robotic process automation arrives

“The last decade was about replacing labor with cheaper labor,” said Chetan Dube, the founder of IPsoft Inc. and a former mathematics professor at New York University. “The coming decade will be about replacing cheaper labor with autonomics.”

IPsoft’s Eliza is a “virtual service-desk employee” that can answer emails and phone calls and conduct conversations with humans. Many multinational companies have tested the RPA technology, and the results have been impressive.

Eliza answered about 62,000 calls in a month, according to one business that tested Eliza. One of the IPsoft’s customers in the media industry has used Eliza as a replacement for Tata Consulting Services Ltd.

Dube also noted that a huge part of India’s intellectual capital is invested in the mundane and repetitive tasks of BPO that can be replaced by RPA technology.

Other adopters and promoters of robotic process automation include Hewlett Packard Enterprise and Konica Minolta Business Solutions Asia, which are among the tech firms moving from hardware to software and services.

More on Automation:

U.K.-based Blue Prism has developed a software development toolkit called Robotistan to help companies create their own software robots for business process automation.

Robotistan costs only $15,000 a year, while an outsourced IT worker costs up to $30,000 per year, and an onshore worker can cost up to $80,000. One of the Blue Prism’s clients replaced 45 outsourced workers costing around $1.35 million a year with 10 software robots that cost only up to $100,000 a year.

A software robot presents a cost-effective alternative to business processes outsourcing because it can cost half as much as a full-time-equivalent (FTE) person working in India and one-fourth of a FTE worker in the U.S. or U.K.

RPA can perform basic transactional tasks, potentially affecting 30 to 40 percent of business processes. RPA is impacting the BPO sector dramatically, and AI advances will soon automate even more process.

Mass recruiters such as Wipro and Infosys will have to change their business models to cope up with the impact. Although robotic process automation is in its infancy, it could well alter or replace millions of jobs worldwide over the next few years.