BPO, or business process outsourcing, is certainly not a new concept. Companies have been using outsourced skills for decades, and by the mid-nineties, the BPO industry was a thriving one. However, as business operations became more complex and demanding, organizations realized that their core staff needed to focus on the bigger picture and that relatively standard and basic functionality could efficiently and more cost-effectively be handled by 3rd parties.
Digitization and globalization trends increased the need for BPO as companies looked to benefit from cheaper offshore solutions to many of their business processes, especially those in the digital space. So much so that around 68% of businesses regularly use outsourcing to increase their productivity and save costs.
Nothing lasts forever, though, and emerging technologies in the automation space are a seemingly significant threat to the very existence, or at least the nature, of BPOs. A considerable threat but an even more substantial opportunity. As with all industries, business process outsourcing will need to change. Many of the outsourced skills that companies use are rapidly becoming automated, and companies are weighing up the cost of automation with the cost of outsourcing skills from BPO providers.
Businesses that previously outsourced mundane and monotonous administration tasks to BPO providers now have the option of automating those processes, and this is a significant threat to BPO providers unless they rethink what they have to offer. Let’s be honest here – BPOs thrive because they can provide cheaper human labor. Companies employ them because it costs less than hiring a department of full-time staff. But when automation becomes a more affordable option than hiring BPOs, guess which one the company will choose? It isn’t only about the money, though; automation offers more.
Adapt Or Die
Automation, particularly Robotic Process Automation (RPA), has only just begun to see even a fraction of its true potential. It’s not going away any time soon, and all industries, including BPO providers, need to get on board or be left behind.
The move from BPO to BPA (Business Practice Automation) is the key here. As a business looking to outsource skills or a BPO provider, you must realize that automation is the way forward. For business owners, that means developing your automation systems or outsourcing it as you would traditional BPO. For BPO providers, I’m sure you’ve figured it out already – You need to include automation in your service offerings to remain relevant and in business.
4 Benefits Of Automation for BPOs
Besides the real risk of becoming a dinosaur, there are many other incentives for BPOs to adopt automation into their business model.
I) Differentiated And Specialised Solutions
As businesses become more automated and forward-thinking, BPOs will need to offer more than just their usual labor services. Using technology and automotive processes will mean that as a BPO, you can attract innovative clients who are looking to work smarter and not harder. Bear in mind that these types of clients are increasing steadily, and as the ability and need to automate grows, so will the need for you to offer it to stay relevant.
II) Cost Control
The move towards mundane tasks being automated is good news for BPO providers when it comes to costs. BPA software is becoming more accessible, and once you’ve invested in it, you can outsource it to as many businesses as needed. However, the cost of paying regular salaries to workers and then recouping that from the monthly fees you are charging is much higher in the long run.
III) Niche Staff
Automation means that mundane tasks are taken care of, and this opens up an opportunity for BPOs to save on their staffing costs and retain only the most expert and niche staff members. They will be responsible for facilitating and supporting clients with their automation systems. Some will also offer expert services that automation cannot substitute.
When you take the unpredictable nature of human labor out of the equation, you’re left with a more consistent and reliable service offering to clients—no more issues with productivity or petty personal problems. BPOs can guarantee outcomes and results for their clients, and that’s always good for business.
What BPOs Need to Do
Understanding the importance of something and doing something about it are two different things. The old USP of cost-saving and cheap labor isn’t going to cut it any longer. Instead, BPOs need to do the following to remain relevant in the age of automation.
Employ A Digital Workforce
BPOs must focus on acquiring a workforce that can solve todays and tomorrow’s problems. Focusing purely on semi-skilled workhorses will not attract companies looking to automate and innovate. BPA needs to be ingrained into the company’s core function to ensure that the BPO is a reliable and relevant service provider.
Buying an automated bit of software or even robotics doesn’t mean you need to fire each employee whose job is being taken over. Instead, what you should be doing is upskilling and training your entry-level staff so that they can remain an active part of the workforce. The move from BPO to BPA is an opportunity for all BPO staff to learn more and provide more effective service delivery to clients.
BPOs need to ensure that their business solutions are as streamlined and automated as possible. Of course, humans aren’t going to be replaced by robots overnight. But companies will be more favourable to BPO solutions that are streamlined enough not to need people overseeing them. In other words, position your services in such a way that when full automation is here, you’ve already achieved it.
It sounds great but implementing these changes might be quite a daunting task for BPOS. So, let’s look at the six steps BPOs should take to incorporate automation.
Step 1 – Implementation Areas
The first step is to determine exactly where this needs to occur. Then, once you’ve decided which sections and departments need to implement BPA, you need to define the processes for each area and develop KPIs in line with them.
Ideally, you should be able to combine automation with existing services to provide clients with various solutions that include the option of automation. You should study each area and department and analyse why they should or shouldn’t be incorporated with automation.
The determining factors include:
- The nature of the automation solutions you have acquired or can provide the customer (Software, robotics, etc.)
- The need for automation solutions from specific industries and clients
- The ability of staff to be up skilled and trained to avoid dismissals
Step 2 – Return on Investment
Calculating ROI is an essential part of the process. It’s no use spending a small fortune on automotive solutions, which will only generate half of your costs back.
It is not always easy and is a significant deterrent for many BPO providers when incorporating automation. To calculate this correctly, you need to take into consideration the following:
- The cost of purchasing automotive software and hardware
- The cost of employing automation experts to either consult or provide ongoing support to your team
- The savings from using less staff
- The potential profits from an increase in client referrals and satisfaction
Step 3 – Leverage Automation Technology
Automation tech can be pricey and developing it in-house means hiring highly-skilled staff for indefinite periods.
Pre-built automation software and technology are available, and this is where you might need to begin to save costs upfront.
Once you’ve learned enough about automation processes, you can look at doing it yourself.
Step 4 – Governance Structure
Having a capable and strategic governance structure is as crucial as automation. It will help when BPA needs to be implemented throughout the organization, and these structures can facilitate this transition.
The governance and corporate structure should allow for the delegation and communication of new business models and strategies and facilitate the need to discuss and debate these changes.
Step 5 – Upskilling
Automation will require a lot of reengineering, and some difficult decisions will have to be made. As mentioned earlier, though, this can be mitigated by upskilling training and developing your workforce to be helpful in an automation-centric environment.
The software needs coding, the strategies need implementing, and there is always a need for human workers, just not in the traditional sense. So, make sure that you try to bring your employees up to standard instead of simply replacing them with an automated process.
So, there you have it – Automation is here, and there’s no going back. While it may seem to pose a distinct threat to BPOs, there are more opportunities than ever before to provide a valuable and relevant service to businesses that, just like the BPOs, need to move with the times.