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Will Business Process Outsourcing (BPO) become obsolete in the era of Automation?

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Innovature BPO’s Conference Theater presentation “Will Business Process Outsourcing (BPO) become obsolete in the era of automation?”

Part 1

Robotic Process Automation (RPA) vs. Business Process Outsourcing (BPO)

  • RPA can save up to 70% over outsourcing, according to Experts at Deloitte Consulting, Everest Group, and KPMG.
  • The recent application of RPA in business has caused a strong negative impact on the BPO industry (The 2019 A.T. Kearney Global Services Location Index).
Should companies continue to outsource or focus on automation? Are there any risks associated with business automation without human input? Find out to decide what most benefits your business.

What is RPA?

RPA stands for Robot Process Automation and as its name implies automation can help save time, and money in some cases, for redundant tasks. If there is some AI/ML algorithm layers being added, the robot could automate more and more complex tasks.

However, in the real world, RPA can’t be applied to everything and Human input is still the best solutions in most of the cases.

Key Facts of RPA

  • 53% of respondents have already started their RPA journey in 2017, 72% in 2020.
  • RPA will have achieved near-universal adoption within the next five years.
  • RPA meets and exceeds expectations across multiple dimensions including:
    • Improved compliance (92%)
    • Improved quality / accuracy (90%)
    • Improved productivity (86%)
    • Cost reduction (59%)
RPA vs BPO

 An employee spends around 4 hours 38 minutes per week completing repetitive manual tasks, which can be taken over by RPA.

The average amount of avoidable rework in Accounting departments can take up to 30% of a full-time employee’s overall time. This equates to savings of 25,000 hours per year at a cost of $878,000 for an organization with 40 full-time accounting staf(according to Gartner research).

leverage RPA

Impacts of RPA on BPO

RPA can save up to 70% over outsourcing, according to Experts at Deloitte Consulting, Everest Group, and KPMG.

The recent application of RPA in business has caused a strong negative impact on the BPO industry (The 2019 A.T. Kearney Global Services Location Index).

  • In the Czech BPO industry, automation has replaced the workforce of an estimated 4,000 employees, which equals 4 percent of their total BPO labor force.
  • Telecommunications company Vodafone also announced that after deploying RPA software, it will lay off 1,700 customer service people in Romania, India, and Egypt, representing about 8 percent of that workforce.
RPA infographic

Source: Deloitte Global RPA Survey 2017

Benefits of RPAs

Flexibility and speed

For any tasks that are rules-based and definable, you can consider applying RPA. You can quickly increase or reduce the workload that you can process, simply by adding more RPA robots or reducing the number of working robots. This gives management the flexibility and speed they need to adapt to business change.

Less training cost

For the tasks that are repeated and rule-based, you will need to train the robot once, after that, the robot does the repeated tasks 24/7 without exception. You do not need to worry about people leaving and training new members.

Higher work accuracy

Once the rules are defined, the RPA robots can follow and achieve higher accuracy rate than humans.

Standard compliance

Your RPA software can be customized to follow a predefined standard, as well as record any audit trail of the tasks. With this, you can easily make sure the compliance of your operation with any standard, either ISO or HIPPA.

Higher customer satisfaction

With standard compliance as well as the speed of response, the overall service quality, and customer satisfaction will be higher.

Disadvantages of RPAs

RPA

Besides advantages, RPA has its weakness compared to humans. The following are some weaknesses you shall consider when applying RPA to your organization.

  1. In the context of processing scanned images and unstructured data, such as free-style emails or non-patterned documents, the current technologies do not allow robots to handle them well.
    Thus, the company must first
    find a way to digitize data using OCR or similar technology. After that, the digitized data can be fed as input to the bots.
  2. RPA is best suited to rules-based processes, so if a business (small to medium-sized company) has frequent changes to its processes, then in this situation, RPA is not a good choice compared to using humans.
  3. Customer experience is very important today. Even though robot technologies are used like chatbots, and voice Bots, human interaction is still preferred by customers.

Hybrid Model: BPO needs RPA to provide better solutions

We combined RPA and human tasks which are less repetitive, we can even increase the speed and enhance the quality by 20-30%.
Part 2

How do BPO companies and accounting professionals leverage RPA?

How can Accounting professionals leverage RPA?​

RPA impacts accounting work not only in BPO industry but also to any business. Accounting professionals can take advantage of automation for their own good.

Acceptance of RPA and its benefits in improving Efficiency and Effectiveness

As Automation and AI are taking over more traditional accounting duties, they can help accountants focus more on non-repetitive, strategic tasks such as financial planning and analysis, or financial risk management.

Accounting professionals need to diversify their skills, become as familiar as possible with the advanced features of accounting softwares (such as forecasting and analytics) in order to interpret and translate the increasingly deep data it provides into actionable advice.

Cybersecurity should become a bigger priority of Accounting professionals. Your responsibility to protect your data goes well beyond the walls of your own company’s data. It includes the data for all contacts in your system, including clients, employees, and service providers.

Level of support for intelligent automation strategy, by stakeholder group

leverage RPA

Source: 2021 Deloitte’s Global Intelligent Automation survey

How can BPO Companies leverage RPA?

RPA can be your differentiation to other players.

Applying RPA technology not only give you the cost benefit but also make you stand out among the BPO providers.

RPA increases the capacity of your workforce quicker.

RPA offers an alternative to the traditional labor-intensive BPO model that we are familiar with.

Your robot workforce is ready to take on repetitive tasks and run 24/7. And there is no limit to the capacity, all you need is more CPU, memory, and software license.

Areas where BPO companies can apply RPA

  • Data integration such as uploading, exporting, downloading and importing
  • Workflow-based works
  • Reconciliations
  • Automated formatting
  • Text mining
  • Conversion such as exchange rate processing
  • UI manipulation
  • Website scraping (crawling)
Robot

FinTech product Awareness in Vietnam

Vietnam is very tech-oriented oriented country.

  • A lot of big tech companies, and lots of startups doing E-invoicing, E signature, BI tools, RPAs, Blockchain, Payment gateways, and e-commerce platforms.
  • Everything can be bought online, shipped, and delivered to your house.
  • Vietnamese use technology every day, they catch up quickly, and they don’t need to be trained endlessly on how to use a program.
  • Digital payments and digital borrowing (a lot of unbanked people) are the top fintech used in Vietnam.
Chart 3.5: Awareness of Fintech Products, by Age Group
graphic for ppt 06

OUR SERVICE MODEL

chart profile 01

Our main differentiator is that we provide outsourcing solutions using consulting approach.​

  • For Clients with already implemented RPA templates or BI tools, Innovature BPO provides talented and well-train resources to execute the process.

We can work on your RPA templates or BI tools while other accounting agents can focus on more complex tasks.

  • For Clients without RPA experience,
    Innovature BPO provides full service cycle:
    • Review and optimize current processes applying RPA
    • Document processes
    • Set up benchmark and reporting
    • Provide resources to execute

Best Practices

Benchmarking is indeed important to create added value for your business.

Benchmarking is a process to discover what is the best standard of performance seen in a specific company, by a particular competitor or in a completely different industry.

  • Number of invoices to be processed by AP officer (Efficiency)
  • Effectiveness (staff cost/quality/ability to meet deadlines) are you employees performing well?
Innovature BPO_AFShowSG 2022_Conference Presentation Report_Will BPO become obsolete in the era of automation
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