5 Benefits of RPA for BPO Companies in 2024
The global business process outsourcing (BPO) industry has experienced rapid growth in recent years, with revenues expected to reach $262 billion in 2022. As companies look to reduce costs and improve efficiency, outsourcing business processes to external providers has become increasingly popular. However, traditional BPO comes with some key drawbacks that impact service quality and process visibility. This is where robotic process automation (RPA) comes in. By deploying software bots to automate repetitive, rules-based tasks, BPO providers can transform their service delivery models to benefit themselves and their clients.
In this comprehensive guide, we‘ll explore the top 5 benefits of RPA for BPO companies looking to thrive in 2024 and beyond. Let‘s dive in.
1. Substantially Lower Operating Costs
For BPO providers, labor represents the single biggest expense. Teams of employees are required to manually execute outsourced processes. However, RPA allows providers to automate tasks at a fraction of the cost of human workers. According to Gartner, RPA can reduce the costs of finance and accounting processes by 65-75%.
Let‘s look at an example. Say a BPO provider handles the accounts payable process for a client. This involves repetitive steps like data entry of invoices, matching invoices to purchase orders, and issuing payments. Traditionally, this would require teams of accounts payable clerks working around the clock to handle the volume. With RPA, software bots can seamlessly log into client systems, extract data from invoices, cross-reference purchase orders, update accounting ledgers, and process payments – without any human intervention.
By deploying RPA, providers can reduce headcount, minimize training expenses, trim management oversight costs, and require less office space and IT infrastructure. One RPA bot can execute the work of 3-5 full-time employees. And bots can work around the clock, with no overtime pay or sick days to worry about. The significant cost savings flows straight to the bottom line as increased profitability.
According to research from Deloitte, RPA yields an average cost reduction of 25-50% for outsourced processes. As the charts below illustrate, providers can realize substantial cost savings across both FTE and infrastructure expenses.
| Cost Component | RPA Impact |
|---|---|
| Full-time Employees | -65% |
| Training | -45% |
| Management Oversight | -40% |
| IT Infrastructure | -30% |
| Facilities | -20% |
RPA provides a silver bullet for BPO providers to significantly reduce delivery costs and improve profit margins. As margins for traditional outsourcing shrink, RPA presents a path to boosting the bottom line.
2. Unmatched Quality Control
Humans are prone to errors. Even the most experienced employee will make mistakes after hours of repetitive, mundane work. However, software bots perform processes flawlessly with 100% accuracy and consistency. RPA ensures strict compliance with predefined business rules and process steps – no exceptions.
Let‘s revisit our previous example. For the accounts payable team, issues like duplicate payments, missed invoices, and inaccurate ledger entries are common headaches. With RPA, these headaches become a thing of the past. Bots will never make a duplicate payment, lose an invoice, or post to the wrong ledger account. The reduction in errors and rework achieved is staggering.
This enables BPO providers to deliver vastly superior quality control to clients. Defects are eliminated, and Six Sigma levels of accuracy are achievable. For clients, this means no more frustrating errors and exceptions arising from outsourced processes. Increased accuracy leads to improved customer satisfaction.
According to research firm HfS, RPA improves process quality by an average of 20-30%. For critical finance and accounting processes, this boost in quality control is hugely impactful. Outsourcing complex processes becomes far more viable using RPA.
As the chart illustrates, RPA can help dramatically boost quality metrics for outsourced processes:
| Quality Metric | Before RPA | After RPA |
|---|---|---|
| Process Defect Rate | 2-3% | 0.5-1% |
| Process Accuracy | 97-98% | 99-100% |
| Exceptions Handled | ~20% | ~5% |
By deploying RPA, BPO providers can deliver flawless execution to clients while eliminating losses from errors and rework. Quality control is no longer a barrier to outsourcing complex tasks.
3. Seamless Scalability on Demand
Client business needs fluctuate unpredictably. A new product launch, acquisition, or holiday season can suddenly double a client‘s process volumes. However, traditional BPO models have limited flexibility to adjust. Hiring and training new staff is time-consuming and costly.
With RPA, new software bots can be deployed within days to absorb spikes in volume. By scaling digitally, BPO providers can ramp up/down capacity on demand without relying on human resources. New client contracts can be onboarded without disruption to existing clients. This gives a dramatic competitive edge over providers without RPA capabilities.
Let‘s revisit our accounts payable example. Say the client acquires a competitor, doubling invoice volumes overnight. With RPA, the provider could simply deploy more bots as needed to handle the increased workload without missing a beat. Without RPA, the provider would struggle to manually scale up in time. The client would likely turn to competitors instead.
RPA platforms like UiPath offer cloud-based bot farms that can be spun up instantly. Bots work round the clock, so capacity can be added 24/7, even for offshore delivery models. RPA enables BPO providers to scale gracefully, ensuring happy clients that never outgrow capabilities.
Research confirms the power of RPA for scalability. According to HSf, RPA drives a 10-15% improvement in capacity scalability for outsourced processes:
| Scalability Metric | Before RPA | After RPA |
|---|---|---|
| Timeline to Scale Capacity | Weeks to months | Days to weeks |
| Cost to Scale | High | Low |
| Geographic Coverage | Limited | Unlimited |
| Overflow Risk | High | Low |
RPA is a game-changer, allowing BPO providers to scale intelligently to keep pace with client growth.
4. Unparalleled Visibility and Monitoring
Lack of visibility into outsourced processes is a top client frustration. Language barriers and geographic distance make it difficult for clients to monitor process performance. RPA dashboards finally offer the transparency clients demand.
Key metrics like bot utilization, process cycle times, and accuracy rates can be monitored in real-time across onshore and offshore delivery models. Data is centralized for easy reporting and analysis. Clients gain full visibility while providers leverage data to optimize processes.
Let‘s return to our case study. The accounts payable provider could use RPA dashboards to monitor:
- Bot utilization rates for each country
- Invoice processing volumes by business unit
- Cycle time from invoice receipt to payment
- Number of exceptions flagged for investigation
clients gain visibility into back-office processes they could never dream of before. Data empowers providers to continually enhance performance. Bots can even be monitored remotely via live video feeds for enhanced oversight.
According to SSON Analytics, 78% of BPO clients rank improved process visibility as a top benefit of RPA adoption. The transformational transparency and analytics RPA enables fosters true win-win partnerships.
5. Redeploying Talent to High-Value Services
RPA adoption allows BPO providers to focus human talent on higher value-added services while bots handle repetitive tasks. Unique human skills like emotional intelligence, problem-solving, and strategic thinking are freed up for core business processes where they make the biggest impact.
Let‘s revisit our case study one final time. By implementing RPA for repetitive accounts payable tasks, the provider could redeploy talent to:
- Cash flow analysis and DSO reduction initiatives
- Financial planning and analysis
- Specialized audit and compliance services
- Process improvement and transformation
This elevates providers up the value chain. New high-margin service offerings can be created leveraging in-house experts. Existing clients see more strategic value, while new clients are attracted. Creative business model evolution becomes possible.
According to research by HfS, RPA drives a 10-12% boost in redeployed resources for core business services and client-facing roles. The impacts across the organization are profound:
| Metric | Impact |
|---|---|
| IT headcount focused on innovation vs maintenance | +15% |
| Manager time focused on employee development and strategy | +20% |
| Customer-facing roles | +5% |
| New high-value service offerings | +3-5 per year |
The talent transformation powered by RPA enables BPO providers to thrive in the digital age. The possibilities are endless.
The Bottom Line
RPA adoption has reached a tipping point across the BPO industry. The technology has moved from hype to a mission-critical enabler of digital transformation. The bottom line benefits – from reduced costs to improved agility – make RPA a no-brainer investment.
BPO providers that fail to adopt RPA risk extinction. To remain relevant, providers must digitally transform service delivery now. In the fast-evolving world of business process services, RPA is the new survival imperative. Consider the 5 benefits we‘ve explored as you stake out your future RPA roadmap.
