While the decline of Business Process Outsourcing (BPO) and the rise of Robotic Process Automation (RPA) represent incredibly disruptive forces – upending industries, markets and, potentially, whole societies – they present powerful opportunities for forward-looking, transformative enterprises to drive long-term value.
Internal business service providers and other industries are embracing RPA in order to move away from outsourcing deals and create operating models that bypass the back office completely. Cloud-based RPA is enabling them to deliver services in a much more responsive, targeted, scalable, cost-effective and “labor-light” manner. RPA has also become more advantageous than employees for even some higher-level, knowledge work.
In fact, KPMG LLP’s quarterly survey of outsourcing buyers, advisors, and service providers reveals that demand for third-party services dropped significantly in 2015.
Along with traditional service providers, other BPO entrants are reevaluating their entire business and operating models through a digital lens. Cloud providers like ServiceNow, Salesforce and Amazon are creating newtypes of service – networked platforms that enable enterprises to operate their business processes virtually, with a much-reduced headcount and very low implementation costs.
Moving toward RPA
As you begin to lay the groundwork for RPA in your business, here are three key areas of consideration:
Reframe your strategy and business model. Embracing RPA is not just about taking out cost. It’s about creating – or protecting – your advantage. Rather than squeezing another nickel out of a linear, people-centric processes, your core objective should be to leverage emerging RPA platforms to digitize business processes, eliminate manual activities and drive greater cost efficiency, responsiveness and productivity.
Reevaluate outsourcing contracts. Look forward. What do you expect from your outsourcing relationships in this new, digitized world? If you’re a buyer of outsourcing, ask your provider what they’re bringing to the table in terms of automation. If you’re a service provider, think about how you can digitize your business process knowledge, and talk to your clients about ways to collaborate.
Redeploy your resources. With RPA, you will eliminate a lot of manual activities and free up skilled labor. How will you manage widespread workforce change? Think about how you can use those displaced employees to do something else for your business. Could those resources take on higher value roles, becoming experts who resolve issues that technology cannot?
Cliff has an extensive background in shared services delivery model design and operations. As a management consultant, Cliff has led strategy, transformation and operational improvement initiatives for numerous enterprises spanning IT, HR, Finance and other corporate services. Cliff and his team have developed KPMG’s Global Business Services (GBS) framework, which provides KPMG’s clients with the market perspective, data, tools and resources to source, integrate and transform back and middle office functions to improve overall operating effectiveness.
Prior to joining KPMG in 2008, Cliff was a managing director at EquaTerra and focused on enterprise shared services improvement and globalization. In 2011, Cliff led KPMG's acquisition and integration of EquaTerra. Prior to EquaTerra, he held a number of roles in operations, marketing and management consulting.
Cliff is a frequent contributor to industry research and innovation initiatives. Cliff leads KPMG’s innovation efforts to integrate disruptive technologies such as robotics and artificial intelligence into back and middle office operations.
The opinions expressed in this blog are those of Cliff Justice and do not necessarily represent those of IDG Communications, Inc., its parent, subsidiary or affiliated companies.