By: Martin Conboy, Publisher of The Sauce a bi-weekly online publication for executives in the BPO and Shared Services space, and Editorial Advisory Board Member of The-Outsourcing.com.
Robot Process Automation (RPA) is the next wave of innovation and is dramatically changing the way business and BPO service providers deal with their customers. This is not some futuristic concept its here and now! (Check out the video link at the end of this story.)
The marginal cost of additional software robots is minimal if not zero. It aims to reduce costs, improve efficiency and productivity by removing repetitive and manually intensive tasks. Thus for services with varying or seasonal demand, robotic automation can be an efficient and rapid means of scaling an operation, at a fixed and consistently uniform level of service and quality. For businesses that have routine customer transactions RPA will be part of an integrated marketing approach, that brings together customer service, sales, marketing and consumer insights. It will also allow organisations to respond quickly to new markets and regulatory demands.
RPA will have a significant impact on the outsourcing and BPO industries in the next few years as BPO providers and their customers look at further ways to reduce costs and improve profitability and move with customer expectations.
Recently, Fairfax Media in Australia wrote a story about Telstra (Australia’s biggest Telco) CEO David Thodey saying that call centre jobs across a range of sectors will not exist in five years because of the surge in internet and smartphone applications.
Mr. Thodey told ABC Radio’s Jon Faine in Melbourne that he understood the “enormous costs” to local communities caused by taking away call centre jobs.
“More and more you’ll use an application on your phone and you’ll use the web to interact with us so the future of call centre jobs is less in the future,” he said. “In reality Jon [Faine] these jobs (call centres) will not exist in five years.”
“We need to be more innovative, we need to create businesses in software, in innovation, in all those areas and some of the other types of jobs we’ve had in the past just won’t be there,” he said.
Telstra has also sent a large number of local jobs overseas with 671 positions sent into Asia in July. But Mr. Thodey said these positions were important to serve the company’s new customers in the Asian region. “We’ve got to become an Australian company doing business in Asia,” he said. “Many of our customers over the next five to ten years will be Asian-based not just Australian. The offshoring is a temporary step in some sense for us as well.”
To this comment, Jon Faine responded: “But you’re so awash with cash you’re giving it back to shareholders in a share buyback so if you wanted to keep more jobs here and squeeze the profit margins to be less you could, couldn’t you?”
David Thodey’s reply signaled a larger strategic perspective: “Well yes we could but it wouldn’t really achieve our long-term objective of building this capability offshore. Also in reality Jon these jobs will not exist in five years. If you think about how you interact with the bank today you don’t go into the bank branch that often. And that’s going to be the truth about many of the traditional service related jobs – it’s going to be more and more digitally done.”
Frank Casale, founder of the U.S. based Institute for Robotic Process Automation (IRPA), alerts outsourcing buyers and sellers to “brace for impact” as process automation creates the next wave of innovation and dramatically changes business and the global economy. “Robotic process automation will force IT and business executives to completely rethink the way they plan, source and budget for their most critical projects,” says Casale.
Millions of people are working in back office functions for the BPO industry, repeating the same processes and procedures daily or being asked to respond quickly with resources and process to support ever-changing business demands.
Like their manufacturing counterparts, software robots (Apps) operate at a fraction of a cost of a human, and can work 24/7/365 without any breaks or complaints. A robotic FTE costs on average a third of what its costs to hire an off-shored FTE. That is why industry analysts such as Datamark and Ovum are predicting how this technology will completely transform BPO.
This means organisations can build virtual back offices staffed with robotic FTEs that can handle millions of back office tasks faster, cheaper and more efficiently than humans can. They don’t have to be perfect; they just have to be better than humans.
That said machine intelligence would never be able to fully replace the intelligence, judgment and communication skills of a human. The likely role of humans in these service market workforces of the future will be in high-level roles that require complex and subjective decision-making. For example, tech support and personalised administration support or value-added activities that require complex analysis by skilled and highly trained personnel.
For a thought provoking view check out this video: Humans Need Not Apply. It lays out the case for why almost half of those currently in the work force could struggle to find work once automation takes over in the near future.
About the Author: Martin Conboy is well recognized as one of the leading voices and knowledge leaders of the outsourcing industry and its role in facilitating BPO success throughout the Asia Pacific. Martin has over 16 years’ experience at a senior level in the market research industry and has spent the last 21 years analyzing and publicly commenting on the Call Centre and Outsourcing sectors across the Asia Pacific. He is a strong advocate for the BPO-ICT / Shared Services sector.
Martin is a Director of www.theoutsourcing-guide.com and coauthor of the first eBook about outsourcing “What is this thing called Outsourcing?”