The RPA market is rapidly evolving, transforming the traditional BPO landscape by decoupling service delivery from labor arbitrage. Key insights from industry leaders indicate that while RPA can enhance efficiency, it poses challenges for organizations reliant on outsourcing, as they must adapt to new processes and technology. The document underscores the importance of education in leveraging RPA effectively and suggests that the future may involve a collaborative relationship between humans and robotic systems.

1. new approaches and what’s unusual is
the speed with which the RPA market is
developing. Normally an industry is built
up over time, with many false starts.
We are seeing the exact opposite in the
automation world; in only the past two
or three years it has leapt almost fully
formed into the industry that we once
called outsourcing. BPO providers are
finally waking up to the fact that their
entire business model could soon be
obsolete and they are anxious. Those
companies that are rolling out automa-
tion are not talking about it because it is
decoupling routine service delivery from
labour arbitrage, something that has sat
at the heart of the BPO market in the
past 20 years. Plus, bearing in mind that
almost all outsourcing service providers’
business models are (still) predicated on
doing work cheaper in far-off lands, this
is extremely worrying for them.
But what about organisations that
don’t outsource? What is the impact of
RPA on a captive business? For Dariusz
C
onference panel discussions are
generally pretty lame affairs -
competitors become frenemies
and nothing much of value comes out
of them. Well, not this time. Chairing a
debate on the impact of automation on
the BPO market at the recent Analyst
Relations Forum conference, I hosted
an animated chat between the chief
executive of a robotic process automa-
tion (RPA) software house, a captive
leader who’d done his own thing, one
of the foremost analysts and a founder
of a consulting firm. One thing became
obvious really quickly; the impact that
automation is starting to have on the
BPO market is but a foretaste of what is
to come.
Tom Reuner of HfS Research knows
his stuff and can articulate it to an audi-
ence of service providers in a way that is
both impressive and scary. He gave an
overview of the automation/autonomics
market, saying that automation is not
one thing. In fact, there is a whole raft of
Bazeli, general manager of Geoban
(the captive shared service operation of
Santander Group), the answer is clear.
By using automation software, initially
from NICE and then by using C# tools
from Microsoft, he has more than 100
applications running in his back-office
operation with nearly 30% now being
automated. For a financial institution this
is extremely rare as, traditionally, most
of the investment is spent on the front
office not in the back office. Bazeli sees
his role as using automation to build a
bridge between the two.
Pascal Baker spent 17 years in out-
sourcing and has also seen the difference
in the last year with automation. He’s
found that clients are using automation
in a different way. Yes, one can still drive
transactional work through automation
to drive out cost, but he finds that cus-
tomers of Symphony Ventures (a leading
RPA consultancy) are increasingly using
automation to do things that they can’t
achieve with outsourcing: for instance,
Rise of the
BPO bots
Guy Kirkwood asks if BPO could
morph into BPA because of the
impact of robotics
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2. using automation to focus on improv-
ing customer experience, increasing
cycle-time because the robots can work
24/7. One of his clients in the care
home market is deploying automation to
allow more staff trained in patient care,
but who were doing administrative tasks,
to focus on patient care – something
that just couldn’t be done through out-
sourcing. The cost savings of using RPA
over BPO are still the same or better,
but it’s much more valuable than just
saving money.
Daniel Dines, CEO of RPA software
firm UiPath, winds back slightly as he’s
still finding organisations that know
nothing about RPA. At the simplest
level, he compares RPA to having an
army of chimpanzees you can train to
do transactional tasks without needing
any breaks to visit the bathroom. Now
there’s an image we weren’t expecting...
The bottleneck, as he sees it, in terms
of widespread adoption is not in the
technology, it’s in the mentality of the
delivery centres and the process issues
that have been in existence far earlier
than the tools necessary to fix them.
Dines believes that robotics alone won’t
replace the hundreds of thousands of
people doing this work – that will come
when artificial intelligence (AI) becomes
more mature – but it is currently
enhancing the work of the humans,
helping them to become more efficient
and work faster. It is an and, not an or
situation.
For those readers who didn’t catch the
last edition of Professional Outsourcing
Magazine, which focused on robotics,
Dines has a cracking analogy: self-driving
cars. There are currently two approach-
es. Most existing car manufacturers are
installing systems that will assist drivers
in specific circumstances while on main
roads or highways; they will steer, speed
up or slow down and change lanes
without input from the human driver.
The other alternative, as advocated and
developed by Google, is the complete
package where the car is in control in all
circumstances. The current RPA solu-
tions are like the first situation, helping
now and available now. The second
requires AI that just does not exist and is
probably five to 10 years out – a similar
time scale for the mass consumption of
Google’s (or to be precise Alphabet’s)
car.
For Reuner, the speed of development
in the RPA market so far has been
precipitous compared with the creation
and rollout of cloud, where the seven
years to a turnkey solution has been
achieved in two or three years. He and
his team note that all of the large out-
sourcing service providers are looking
at RPA, but most are looking only at a
sub-processes level. A tangible example
is a mediating system in the IT helpdesk
environment. The robot talks to the
virtual agent, conducting simple tasks
such as password resets. This is possible
as the processes in IT have been well
standardised over many years. This
allows the robot to follow IT service
management (ITSM) standard operating
procedures, so the clients no longer
need human helpdesk agents to carry
out these tasks. Compared to IT, BPO is
much more complex with sub-process-
es being more specialised. One would
need to have the skills and experience
of a business analyst to understand
the intricacies of each element of, say,
finance or HR. It’s only by combining the
features of several systems that compa-
nies can move their business processes
towards an autonomic “as a service”
future.
What’s interesting is the dichotomy
between the rise of BPO 20 years ago,
when it was the advisers and consultants
who were leading the charge, and today,
where it could be argued that most
consultants are behind the curve. Baker
believes that this is certainly the case;
the market just isn’t mature enough to
add value to the consultants’ clients.
For BPO, once the market was mature,
there were armies of consultants and
advisers and the tangible results led to
first, second and third-generation BPO
deals and the associated commoditisa-
tion of services. RPA is a new phenom-
enon and it’s taking the analysts and
advisers time to catch up. At present
the small number of organisations in
the RPA ecosystem are doing the lion’s
share of the education. This is accelerat-
The speed of
development in the
RPA market so far
has been precipitous
compared with the
creation and rollout
of cloud; the seven
years to a turnkey
solution has been
achieved in two
or three years.
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3. greater for captives but it requires much
more education. He also thinks that for
the outsourcing community that use
robotics, there will be an increase in
profitability but a marked decrease in
revenues.
It can be argued that the fastest BPO
companies to embrace RPA and AI will
be in the position where they become
immune to the vagaries of labour
arbitrage and either position themselves
as being ripe for acquisition, or even in
a better position to acquire capability
themselves as they pick up more work
from the more traditional and slower
competition. In other words, RPA
might well be the catalyst that leads
to increased consolidation among the
outsourcing providers.
Reunerr thinks differently; he has
observed that the companies with most
to lose from automation – the Indian
service providers with their vast access
to cheap labour – are counterintuitively
at the forefront of adoption. Many com-
mentators read these companies’ re-
ports, which state they’re reducing their
headcount by a third (which in some
cases translates to more than 100,000
jobs) and see only one end-game, but
it is more complex than that. Reuner
sees these companies fundamentally
reshaping themselves. The generalist
back-office jobs are shifting much more
towards analytical and technical roles,
but this does not mean that we’ll see an
increase in consolidation as a result.
For Baker, the questions that the
advisers should be asking on their clients’
behalf are about the full end-to-end
transformation capability and how RPA
can facilitate a true “people, process,
technology” play. BPO has delivered
phenomenal labour arbitrage but has
ing as large corporate organisations
hear about the potential value of RPA.
So, education for Symphony is being
seen in two ways; clients are pushing
the advisers and consultants for more
information (the reverse of the situation
20 years ago), and the RPA technolo-
gy companies, system integrators and
specialist consultancies are continuing to
push information out to the market.
From a captive client perspective, the
question is whether RPA is more appli-
cable as an alternative to BPO specifically
and outsourcing in general. Bazeli sees
large outsourcing companies reviewing
the technology to help deliver on the
promises they have made to their inter-
nal clients. For captives, just by moving
work to an offshore-based shared ser-
vice centre and reaping the cost savings,
most organisations remain happy. For
many captive leaders, the idea of RPA
remains either that it is robotics and
therefore very complex or simply mac-
ros that have been used for years. Very
few captives see the middle ground,
where RPA can replicate the work of
people in a much more controlled and
stable environment. Bazeli also believes
that RPA is an enabler for captives to
review how streamlined a captive’s
processes actually are. Much has been
made of lean and Six Sigma operations,
but when RPA is being considered and
one starts scratching below the surface,
many captives still have much to do.
Bazeli finds that BPO firms are more
mature and sophisticated in their
adoption of RPA than captives. The top
five BPO companies already have RPA
practices, but he thinks that the balance
of power between supplier and captive
will reverse over time. For UiPath, he
sees the potential of RPA being much
seldom delivered more than lower
FTE costs, which advisers and clients
alike have wanted to use as their apples
with apples comparisons in competitive
cycles.
RPA will undoubtedly offer significant
cost reduction (even versus perceived
low-cost locations), in some cases
achieving more than 1,000% ROI,
but that is not the point; it is how the
client’s best people can avoid doing
the mundane transactional tasks and
move to more analytical, higher-value
judgemental work that will fundamentally
drive successful uptake.
The RPA market is still maturing. To
discuss how and where it will have the
greatest impact requires an overview
that the AR Forum debate was able to
provide. By having representation from
what are arguably the leading organisa-
tions in the ecosystem articulating their
different perspectives, not only did we
avoid the “lame panel”, but the out-
sourcing providers and end-user clients
in the room could use the information
to shape their offerings and their com-
panies’ future direction. So my thanks to
Daniel, Dariusz, Tom and Pascal.
The value of this interaction to the
audience is a clearer view of where
automation is going and, in conclusion,
RPA then is all about human and robot
collaboration. In terms of where we are
now, there are really no robots today
that can take over an entire process
from end to end as business processes
are still likely to require decision-mak-
ing and judgement that the machines
without AI currently can’t manage. So, to
answer the question posed at the start
of this piece, BPO will not become
BPA but it might well ultimately
become BPAI.
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