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RPA: What is It and How Does It Impact the BPO Sector?

When you hear the term “Robotic Process Automation” you might think of advanced manufacturing or perhaps even the rise of machines.

But RPA isn’t the repetitive motion of a robotic arm on an assembly line. It’s the application of artificial intelligence and machine learning to automate business processes. This could mean anything from customer service chatbots to automating data entry in back-office systems.

By 2018, nearly a third of CIOs across the globe were investing in RPA and that number has only gone higher and higher since. The pandemic has only increased the demand for RPA as businesses look to automate processes and free up their employees for other tasks.

RPA can be used in any industry but it’s particularly helpful in the business process outsourcing (BPO) sector. That’s because BPOs are all about taking on repetitive, low-value tasks from their clients and automating them so they can focus on more strategic work. This is the perfect use case for RPA.

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What is RPA?

Put simply, robotic process automation (RPA) is the use of software to automate business processes.

RPAs are designed to mimic human actions. They can log into applications, follow rules and procedures, extract data, and complete transactions just like a human would. The main difference is that RPAs can work much faster and more accurately than humans ever could by eliminating wasted time.

Let’s look at an example to make it crystal clear.

Say you work in Accounts Payable and every day you have to log into the system, open each invoice, and enter the data into your accounting software. This is a repetitive, low-value task that takes up a lot of your time.

But with RPA, you could program a software bot to do it for you. The bot would log into the system, open each invoice, extract the data, and enter it into your accounting software. Just like that, your Accounts Payable process is automated and you can focus on more strategic work.

RPAs are typically used to automate simple, repetitive tasks. But as the technology has advanced, they’ve become capable of much more complex automation.

How has RPA technology advanced in recent years?

In the early days of RPA, the technology was fairly basic. Software bots were only able to automate the most mundane tasks.

But as artificial intelligence (AI) and machine learning have become more sophisticated, so too has RPA. AI and machine learning give RPAs the ability to understand and interact with unstructured data like images and natural language text.

This means they can be used for more complex automation tasks like identifying irregularities in financial documents or categorizing customer service requests.

The advances in RPA technology have made it a more attractive solution for businesses looking to automate their processes. But the benefits of RPA go beyond just the technology itself.

Benefits of RPA

Given how advanced and complex the systems have become, there are real out-of-the-box benefits that any company can enjoy from implementing RPA in their non-core processes.

  • Cost savings: RPAs are typically much cheaper to implement than other process automation solutions like enterprise resource planning (ERP) systems. That’s because you don’t need to make any changes to your existing IT infrastructure.
  • Increased efficiency: RPAs can work much faster and more accurately than humans. This means they can help you complete tasks in a fraction of the time it would take to do them manually.
  • Improved compliance: RPAs can help you comply with regulations by automating tasks like data entry and document management.
  • Improved customer service: RPAs can be used to automate tasks like customer service chatbots and order processing. This can free up your human employees to provide a higher level of customer service.
  • Reduced risks: By automating manual, repetitive tasks, RPAs can help you reduce the risk of human error.

These benefits have made RPAs an attractive solution for businesses across a wide range of industries. But the benefits are particularly pronounced in the BPO sector.

person typing on keyboard about RPA

How BPO has changed because of RPA

There was a time when BPO was limited to low-value, repetitive tasks like data entry and customer service. But the rise of RPA has changed all that.

RPAs can be used to automate any number of business processes, from invoicing to claims processing. This has allowed BPOs to move up the value chain and take on more complex work for their clients.

This shift has had a major impact on the BPO industry. In the past, BPO was seen as a low-cost alternative to in-house process automation. But the rise of RPA has changed that perception. BPOs can now offer their clients a comprehensive solution that includes both high-value and low-value work.

This shift has also had an impact on the way BPOs are structured. Previously, they were often organized around specific tasks or processes. But with RPA, BPOs can now be organized around specific client needs. This allows them to be more flexible and responsive to their clients’ changing workflows and requirements.

Because of that, sophisticated BPO corporations have been born, shared services centers have become a staple for larger enterprises, and global outsourcing has expanded to every corner of the planet.

Replacing old systems

Some wonder if the rise of RPA, while positive for BPO to this point, relatively early on, could eventually be a death knell. After all, if a machine can do the work of a human, why keep the human around at all?

The reality is that RPA is not about replacing humans with machines. It’s about augmenting them so they can focus on more valuable work, given how important human capital still is.

Consider the customer service representative. RPAs can be used to automate simple tasks like data entry and account lookups. This frees up the customer service representative to provide a higher level of service. They can now focus on tasks like resolving customer issues and upselling products and services.

In this way, RPA creates new opportunities for human workers. Rather than replacing them, it allows them to focus on more valuable work.

Protecting and optimizing core competencies has become more and more of a focus even for small businesses, as the eternal chase for higher margins and increased market share has only become more cutthroat.

This has been a fundamental driver in the growth of the BPO industry, as companies have outsourced non-core or menial tasks to other companies that can perform them at a lower cost. That growth has now spread to RPA as well, especially as the technology has become more advanced and more affordable.

How to implement RPA in your own business

It can be easy to decide that RPA would be beneficial for your company but difficult to determine exactly how to use it. The first step is to understand what processes would be good candidates for automation. These are typically tasks that are:

  • Repetitive
  • High-volume
  • Low-value
  • Data-heavy
  • Rules-based

The next step is to select the right software. Several vendors offer RPA software but it’s important to select one that will integrate seamlessly with your existing systems. You’ll also want to consider the scalability of the solution and its ability to handle future growth.

Once you’ve selected the right software, you’ll need to train your employees on how to use it. This is important because RPA can’t be implemented successfully without buy-in from your team. They need to understand how the technology works and how it will impact their day-to-day work.

Finally, you’ll need to establish governance around your RPA implementation. This includes setting up processes and controls to ensure that the technology is used effectively and compliantly.

laptop gadget rpa

Example of RPA implementation

Let’s walk through an example to drive home how to apply this to your own business.

Meet TableCorp, a manufacturing company that produces tables with a built-in sound system. They procure the system from another company SoundBoys and pay them both a per-unit cost and a royalty agreement.

If they wanted to implement RPA in their company, they would:

  • Examine the process of ordering from SoundBoys. Since they can forecast sales accurately after years in business and the process is entirely rules-based, it meets the criteria we listed above and is a good candidate for automation.
  • Select an RPA software. Their current material requirements planning solution has an RPA module that can be easily integrated.
  • Train their employees on the new software. They would need to understand how to set up the bots and how to monitor them once they’re live.
  • Set up governance around the use of RPA. This includes establishing processes and controls for bot management as well as developing policies for when and how bots can be used.
  • Monitor results and tweak procedures. They must make sure that their inventory levels aren’t getting out of control, or that another unforeseen issue has arisen. If something is going wrong, changes must be made quickly.

Now that we’ve seen how RPA can be implemented in a company, let’s dive into some of the challenges that TableCorp — and you  – may face along the way.

Challenges you may face

Applying RPA to your business, even with the help of a BPO provider, isn’t necessarily going to be easy. You’ll likely face several challenges along the way, and make some of the same mistakes that others have made before you.

  • Resistance to change: Many employees are resistant to change, particularly when it comes to technology. They may be worried about their job security or simply reluctant to learn new things. It’s important to address these concerns head-on and help your team see how RPA can benefit them.
  • Lack of data: For RPA to be successful, you need high-quality data. This can be a challenge, particularly if you’re working with legacy systems. You may need to invest in data cleansing and enrichment tools to get your data up to scratch.
  • IT dependencies: RPA relies on integration with other systems, which can be a challenge if you don’t have the right IT infrastructure in place. You may need to invest in new hardware, software, or experienced technicians to support your RPA implementation.
  • Implementation costs: RPA is an investment, both in terms of the software and the training required for your team. You’ll need to weigh up the costs against the potential benefits to see if it’s worth pursuing.
  • Regulatory compliance: Depending on your industry, you may need to consider regulatory compliance when implementing RPA. This is particularly relevant if you’re dealing with sensitive data like medical records or financial information.
  • Security risks: As with any new technology, there are security risks associated with RPA. You’ll need to put in place adequate security controls to protect your data and systems.
  • Skills shortages: There is currently a shortage of skilled RPA professionals. While this is likely to change as they become more ubiquitous, it can make it difficult to find the right people to help you implement and support your RPA initiative, potentially forcing you to develop them yourself.

RPA is not a silver bullet  – It’s important to remember that RPA is not a magic solution that will solve all your problems. It’s a tool that needs to be used appropriately to be effective. Over-automating can lead to errors and process breakages, so it’s important to strike the right balance.

person using laptop for rpa

Final thoughts

Despite these challenges, RPA can offer significant benefits for your business, including increased efficiency, reduced costs, and improved compliance. When implemented correctly, RPA can help you free up your employees to focus on more value-added work, providing a real competitive advantage.

By following the tips above while avoiding some of the common mistakes, you too can be automating processes and enjoying the benefits of a strong RPA system.